© 2018 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions: The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@ worldbank.org. CONTENTS ACKNOWLEDGEMENTS 1 ACRONYMS 2 CONTEXT FOR THIS GUIDE 3 FOREWORD 6 PART 1. FUNDAMENTALS OF PROFESSIONAL COMPETENCE AND INTERNATIONAL REQUIREMENTS 1 FOR CONTINUING PROFESSIONAL DEVELOPMENT PROGRAMS  7 1.1. Professional competence as an ethical obligation 9 1.1.1. What is professional competence? 9 1.1.2. Attaining and maintaining professional competence 9 1.1.3. Professional competence is grounded in ethical requirements 10 1.1.4. Looking beyond obligations 10 1.1.5. What if a professional accountancy organization doesn’t have sole authority to require CPD? 11 1.2. International Education Standard 7 of the International Accounting Education Standards Board: Requirements for Professional Accountancy Organizations 11 1.2.1. International Education Standards™ of the International Accounting Education Standards Board 11 1.2.2. Objective of IES 7 (2020) 12 1.2.3. Scope and objective  13 1.2.4. Overview of IES 7 (2020) 13 1.2.5. Promotion of and access to CPD 14 1.2.6. Measurement of CPD  15 1.2.7. Monitoring and enforcement of CPD  16 1.2.8. CPD framework 18 1.2.9. Implementation support materials 18 1.3. IES 8 – Professional Competence for Engagement Partners Responsible for Audits of Financial Statements 19 1.4. CPD and Competency Frameworks 19 1.4.1. What is a Competency Framework? 20 1.4.2. How PAOs use Competency Frameworks to support CPD 21 1.4.3. If a Competency Framework has not been established 22 2 PART 2. CPD STRATEGY, STRUCTURE, AND POLICIES 23 2.1. Strategic decision-making for CPD programs 25 2.1.1. Determine authority and obligations 25 2.1.2. Define roles for oversight and accountability 26 2.1.3. Determine strategy 26 2.2. Organizational maturity as a consideration for CPD strategy 29 2.2.1. What is meant by “maturity” of a PAO? 29 2.2.2. Measuring PAO maturity 30 2.3. Developing policies 32 2.4. Considerations for organizational structure 35 3 PART 3. ADMINISTRATION, MONITORING, AND ENFORCEMENT 36 3.1. The operational cycle for CPD 38 3.2. Communication, guidance, and tools 38 3.2.1. Communication with members and other stakeholders 38 3.2.2. Guidance and tools to support compliance 40 3.3. Providing and/or facilitating access to CPD 42 3.3.1. Determining the scope and breadth of course offerings 42 3.3.2. Options for CPD formats 44 3.3.3. Facilitating access to CPD: development and delivery options 47 3.4. Monitoring and supporting member reporting and compliance 51 3.4.1. Administering CPD completion and reporting 51 3.4.2. Monitoring compliance 51 3.5. Investigating, remediating, and sanctioning non-compliance, and reporting results 53 3.5.1. Investigating, remediating, and sanctioning 53 3.5.2. Reporting of results 54 4 PART 4. DEVELOPING AND DELIVERING ENGAGING AND EFFECTIVE CPD  55 4.1. Elements of an engaging course 57 4.1.1. The importance of participant engagement 57 4.1.2. Achieving engagement 57 4.1.3. When your “students” are professionals 60 4.2. Presentation methods and types of participant activities 61 5 PART 5. INCLUDING ETHICS AND PROFESSIONALISM IN THE CPD PROGRAM  64 5.1. Importance of ethics and professionalism in CPD programs 66 5.2. Professional skills 66 5.3. Professional values, ethics, and attitudes 68 CONCLUDING COMMENTS 70 APPENDIX. CPD PRACTICES AT THE CHAMBER OF AUDITORS OF SERBIA 71 5.4. Introduction  71 5.5. Continuing professional development in Serbia 74 5.6. Suggestions for improvement of CPD practice in Serbia  81 5.7. Annex: Shortcomings in initial professional development  83 ACKNOWLEDGEMENTS The Guide was developed by a team from the The team also wishes to extend special thanks to World Bank’s Centre for Financial Reporting Reform the following individuals whose contributions and (CFRR) including Alfred Borgonovo, Senior Financial assistance greatly contributed to the quality of Management Specialist, Brian Friedrich, Consultant, this publication: David Mc Peak, Principal, IAESB; and Professor Dragan Lončar (University of Belgrade), Nancy Foran, Vice President, International at CPA Consultant. Editorial assistance was provided by Canada; Mahalah Groves, Association of Chartered Susan Schroeder and Ecaterina Gusarova. Anara Certified Accountants (ACCA); Boško Vidaković, Tokusheva, Program Assistant, CFRR, provided Secretary General; and Mihailo Lazarevic, Education administrative support throughout the project. The Department Director at the Chamber of Authorized project was supervised by Adenike Sherifat Oyeyiola, Auditors, Republic of Serbia. Practice Manager, World Bank. This publication was completed under the Serbia An outstanding group of peer reviewers provided Technical Assistance for Reform of Corporate invaluable guidance and feedback that markedly Financial Reporting (STAR-CFR) project, which is improved the publication: Jiwanka Wickramasinghe, supported by the Swiss Confederation, and is carried Senior Financial Management Specialist, GGOAE, out under the REPARIS Multidonor Trust Fund. World Bank; Abbas Hasan Kizilbash, Ana Cristina Hirata Barros, and John Hodge, Senior Financial Management Specialists, EPSPF, World Bank; Clare Hodgson, Senior Manager Professional Development Products, Association of Chartered Certified Accountants (ACCA); Linda Calder, Professional Development Manager, ACCA; Simone Leonard, VP Education and Professional, CPA British Columbia, Canada; Manil Jayeshinge, Board Member, South Asian Federation of Accountants and Chairman, CA Sri Lanka; and Lefaria Kinimi, Manager, Capacity Building, Pan African Federation of Accountants. 1 ACRONYMS ACCA Association of Chartered Certified Accountants CAPA Confederation of Asian and Pacific Accountants CPA Australia Certified Practising Accountants of Australia CPA Canada Chartered Professional Accountants of Canada CPA Ireland Institute of Certified Public Accountants in Ireland CPD Continuing Professional Development IAESB International Accounting Education Standards Board™ ICAEW Institute of Chartered Accountants in England and Wales ICAS Institute of Chartered Accountants of Scotland IESs IAESB’s International Education Standards IESBA International Ethics Standards Board for Accountants® IESBA Code International Code of Ethics for Professional Accountants™ (including International Independence Standards™) IFAC International Federation of Accountants® IPD Initial Professional Development KSAs CAPA’s Key Success Areas PAO Professional Accountancy Organization PD Professional Development SAICA South African Institute of Chartered Accountants SME Subject-Matter Expert SMO Statement of Member Obligations 2 CONTEXT FOR THIS GUIDE Professional competence as a key ethical Maintaining professional competence requires that responsibility professionals commit to lifelong learning and to staying current on relevant technical and professional Protecting the public interest is at the heart of every standards, as well as developments and trends in professional accountancy organization’s (PAOs) the business environment. Continuing professional mandate. Fundamental to this mandate is the need development (CPD) “enables a professional to ensure that practicing members of the profession – accountant to develop and maintain the capabilities whether in the role of auditor, accountant, or otherwise to perform competently within the professional – maintain professional competence, in order to environment.”2 serve their clients and employers effectively and with sufficient expertise. Professional competence is so The profession’s key source of standards and essential to the profession that the International Ethics guidance on CPD is International Education Standards Board for Accountants® (IESBA) includes Standard 7 (IES 7) maintained by the International it as one of the profession’s core ethical principles. Accounting Education Standards Board (IAESB). The The 2018 International Code of Ethics for Professional latest revision of IES 7 describes CPD as “learning Accountants™ (including International Independence and development that takes place after initial Standards™) defines professional competence as professional development (IPD), and that develops attaining and maintaining “professional knowledge and maintains professional competence to enable and skill at the level required to ensure that a client professional accountants to continue to perform or employing organization receives competent their roles competently. CPD includes learning and professional service, based on current technical and development activities that are relevant to the roles of professional standards and relevant legislation.”1 professional accountants, such as: (a) education, (b) training, (c) practical experience, (d) mentoring and coaching, (e) networking, (f) observation, feedback, and reflective activities, and (g) self-development activities.”3 1 International Ethics Standards Board for Accountants, International Code of Ethics for Professional Accountants™ (including International Independence Standards™), New York: IFAC, 2018, para 110.1 A1 [“IESBA Code”]. Available online . Note that free registration is required. 2 Ibid at para 113.1 A2 3 International Accounting Education Standards Board, International Education Standard 7, Continuing Professional Development (Revised), New York: IFAC, 2018, at para 2 [“IES 7 (2020)”]. Available online . Note that free registration is required. 3 Responsibility for maintaining The Guide follows a logical progression, first competence exploring the fundamental concepts of professional competence and the ethical and educational Maintaining competence is the responsibility of each requirements for CPD programs to support that professional accountant, and the specific actions competence. The Guide then discusses the high- needed to do so will vary by individual. As overseers level strategic decisions that need to be made at and/or regulators of the profession, PAOs have an the governing level of the PAO, and the factors that obligation to promote and support professional need to be considered in setting strategy, structures, members in maintaining competence, developing and policies. Once these fundamentals have been additional competence, and enhancing the established, the Guide then follows a systematic path consistency of competence across their memberships. of putting the pieces in place to support the strategy. In fulfilling this obligation, they often collaborate with Practical guidance is given on: other organizations that provide relevant, effective, •• the administrative aspects related to and engaging learning experiences for members. implementing, monitoring, and enforcing CPD These stakeholders typically include: programs, and •• universities and other academic institutions; •• content development to help create actual •• commercial training organizations or tuition learning materials that are engaging and providers; comprehensive. •• firms and companies with established internal training departments; •• individual subject matter experts who are skilled STANDARDS in both their field of expertise and in developing and delivering quality learning materials for professionals; and •• government departments and regulatory STRATEGY agencies, especially in countries where the PAO does not have direct responsibility, or only shared responsibility over matters related to CPD of professional accountants. POLICIES Objectives and features of this Guide CONTENT This Guide aims to support the endeavors of PAOs, and the stakeholders they collaborate with, including groupings of PAOs or regional organizations, as well as subject matter experts in implementing and ADMINISTRATION maintaining CPD systems that are: •• compliant with international standards and best practices; •• sustainable in the local context and environment; and •• robust in their support of members as they strive to maintain and enhance their competence. 4 This guide is relevant to all PAOs, however PAOs may need to adapt the recommendations to their level of maturity and resources available, as pointed out in different sections of the guide. The guide is also based on standards and practices at the time of its writing. The World Bank will use the guide to support regional and national programs involving CPD practices and endeavor to produce updated versions over time, incorporating feedback received from PAOs, clients, and other stakeholders. To support practical application of the guidance provided, the following features are included: •• Key questions that will be covered by each part are reviewed at the beginning of each part. These questions are denoted using a question mark ? KEY QUESTIONS icon. •• Key terms used in the guide are selected to conform with international standards, to promote KEY TERMS consistency in language throughout the CPD community. These terms are highlighted using a pencil icon. •• Important resources for research and future reference are denoted using a book icon. Links IMPORTANT RESOURCES to these resources are included for ease of use. •• Important tips and guidance notes are highlighted using a lightbulb icon. These tips emphasize the key points to be considered when designing, IMPORTANT TIPS implementing, and maintaining an effective CPD system. 5 FOREWORD “Maintaining professional competence A clearly defined professional development requires a continuing awareness and framework, adapted to the local regulatory an understanding of relevant technical, environment and to individual specializations and professional, and business developments. career aspirations, helps ensure we all achieve an Continuing professional development appropriate minimum level. Clearly, this is an area enables a professional accountant to where “one size does not fit all” – either for individual develop and maintain the capabilities to accountants or for those responsible for overseeing perform competently within the professional continuing professional development standards. environment4”. This Guide on Continuing Professional Development While most of us learn “on the job” every day, for seeks to assist professional accountancy professional accountants that alone is not sufficient to organizations, government agencies, and other ensure that we demonstrably achieve the high level regulators involved with this critical responsibility in of professional competence and ethics expected setting, implementing, and enforcing appropriate to maintain public trust. This is especially important requirements. We hope it provides useful guidance when the credibility of the whole profession can be that will help support our collective competence and undermined by any accounting error or oversight, image as members of the accounting profession. sometimes with devastating consequences in the form of major corporate scandals. The requirement to maintain competence throughout Ed Olowo-Okere a career is a key feature which distinguishes a Global Director profession from an occupation. Lifelong learning Governance Global Practice not only helps accountants to meet our ethical The World Bank requirements, it also supports the growth of our career and self-fulfillment as individuals. As professional accountants we are well aware that in our constantly changing world it is vital to embrace new learning, for example, of new standards, techniques, and technologies. In addition to supporting the performance of our core job responsibilities, this helps us to adapt as we develop in our careers, whether by changing employers, moving into specialized or managerial roles, or creating our own business venture. 4 International Code of Ethics for Professional Accountants published by the International Ethics Standards Board for Accountants, Subsection 113 – Professional Competence and Due Care 113.1 A2 6 PART 1 Fundamentals of Professional Competence and International Requirements for Continuing Professional Development Programs Highlights of Part 1 Part 1 explores the foundational question of why CPD is essential to the profession and what the established global requirements are. Part 1 covers: •• Professional competence as a key ethical obligation for professional accountants, in accordance with the International Code of Ethics for Professional Accountants™. •• An overview of the requirements for PAOs under IES 7 of the IAESB. •• The link between competency frameworks and CPD. Key questions addressed in Part 1 •• Why is CPD necessary? •• What are the international requirements for CPD? ? •• How does CPD relate to a Competency Framework? 8 1.1 Professional competence as an ethical obligation 1.1.1 What is professional competence? When it comes to international standards for the gymnast does. Can you explain to someone else accounting profession, the world looks to the how a gymnast performs a back-flip? Probably you International Federation of Accountants® (IFAC) and answered “yes” to this question. But could you its independent standard setting boards for guidance actually DO a back-flip? Most of us cannot – we may and leadership. The IAESB defines Professional have knowledge, but not the competence. Competence as follows: In a professional context, competence is based on The ability to perform a role to a defined standard. one’s ability to perform the role of a professional. As Professional competence goes beyond knowledge the IAESB definition indicates, this requires having of principles, standards, concepts, facts, and the foundational knowledge and being able to procedures; it is the integration and application apply and integrate that knowledge in a manner that of (a) technical competence, (b) professional skills, demonstrates professional judgment and values. It and (c) professional values, ethics, and attitudes.5 is the application and integration of professional skills, values, ethics, and attitudes that distinguishes In other words, competence is based on one’s ability a professional accountant from an accounting to perform tasks, not simply on having the underlying technician. textbook knowledge. For example, think of what a 1.1.2 Attaining and maintaining professional competence Attaining professional competence begins when Once a professional accountant becomes designated, an individual starts pursuing a professional competence is maintained and enhanced – deeper accounting designation. Competence is expected and/or broader than the minimum expectations to be developed throughout their university and for certification – through CPD. IES 7 – Continuing professional studies, as well as during the required Professional Development™ specifies requirements work experience and training program. The IESs refer related to CPD. The most current version is effective to the development of competence occurring before January 1, 2020, and is referred to as IES 7, Continuing professional certification as IPD, and the IESs define Professional Development (2020).6 the minimum levels of competence expected prior to qualifying as a professional. IPD standards are specified in the IESs 1 through 6. 5 International Accounting Education Standards Board, IAESB 2019 , Handbook of International Education Pronouncements, New York,: IFAC, 2019, at paragraph 18 [“IAESB IESs”]. Available online: https://www.ifac.org/system/files/publications/files/Handbook-of-International-Education- Standards-2019.pdf 6 Ibid at page 174 9 1.1.3 Professional competence is grounded in ethical requirements The IESBA develops and maintains the International Within the IESBA Code, a direct tie is made between Code of Ethics for Professional Accountants™ competence and completing CPD: ( I n c l u d i n g I n t e r n at i o n a l I n d e p e n d e n c e Maintaining professional competence requires Requirements™). The IESBA Code is founded on five a continuing awareness and an understanding fundamental principles, one of which is professional of relevant technical, professional and business competence and due care. The meaning of this developments. Continuing professional principle is explained as follows: development enables a professional accountant to A professional accountant shall comply with the develop and maintain the capabilities to perform principle of professional competence and due competently within the professional environment.9 care, which requires an accountant to: •• Attain and maintain professional knowledge This paragraph emphasizes that competence and skill at the level required to ensure that requires capability and not just knowledge. a client or employing organization receives Because the business world is constantly changing, competent professional service, based on knowledge becomes dated very quickly, so updating current technical and professional standards technical knowledge is essential. Recall from Part and relevant legislation; 1.1.1 that professional competence also includes integrating and applying professional skills, values, •• Act diligently and in accordance with applicable ethics and attitudes. These are sometimes referred technical and professional standards;7 and to as soft skills, non-technical skills, or enabling •• Take reasonable steps to ensure that those competencies. working in a professional capacity under the accountant’s authority have appropriate training and supervision.8 1.1.4 Looking beyond obligations The international requirements in the IESs and in and attitudes of professional accountants for the IESBA Code present a strong case for CPD (and which the organization is responsible. support the PAO in meeting its obligations under the IFAC Statements of Member Obligations (SMO)), •• Requiring CPD signals to the public – particularly clients and employers of professional accountants but there are other compelling reasons why PAOs, – that the profession recognizes the importance regulators, and those with oversight of professional of professional competence and is regulating accountants should be motivated to ensure that accountants appropriately. This promotes public robust CPD programs are in place for professional confidence in the profession. accountants in their jurisdiction. For example: •• CPD programs help PAOs meet their mandate •• Increased competence of professional accountants strengthens financial reporting and of protecting the public, by raising the levels of the audit function and provides more reliable and technical and professional skills, values, ethics, useful information to the investing public. 7 IESBA Code, supra note 1 at para R113.1. 8 Ibid at para 113.2 9 Ibid at para 113.1 A2. 10 •• Trading partners expect that a jurisdiction’s •• CPD standards are required for statutory auditors accounting profession will be sufficiently mature under the European Union (EU) Audit Directive. before they are comfortable investing. Having a well-functioning CPD system is a sign of this Evaluating the benefits of CPD programs is a useful maturity. exercise within every PAO, to expand commitment •• Compliance with good international practice to CPD beyond a mere compliance exercise. supports comparability and recognition with other PAOs and other organizations. 1.1.5 What if a PAO doesn’t have sole authority to require CPD? Although IFAC expects every PAO to maintain a •• No Responsibility: The PAO is required to strong CPD system and program, an interesting encourage and assist those responsible for CPD situation arises for a PAO if it does not have sufficient requirements. regulatory authority to make autonomous decisions with respect to CPD policies and requirements. In •• Shared Responsibility: The PAO is required to implement those requirements of IES 7 for which some jurisdictions, for example, the responsibility they have direct responsibility. The PAO is to and authority for requiring CPD may be split between encourage and assist the relevant authorities in the PAO and the government or may fall to an areas they do not. independent regulator. In its SMO, IFAC distinguishes three levels of responsibility a PAO may have over CPD: PAOs with no or shared responsibilities would still be expected to use their best efforts to achieve •• Direct Responsibility: The PAO is required to compliance with the international standards. implement the requirements of IES7. 1.2 IES 7 of the IAESB: Requirements for PAOs 1.2.1 International Education Standards™ of the IAESB As mentioned previously, IES 7 (2020) contains the it is beneficial to review the full range of IESs and their requirements for professional accountants and PAOs scope, to provide context10. with respect to CPD. Before focusing on IES 7 (2020), 10 IAESB IESs, supra note 4. 11 IESs 1 to 6 relate to IPD, whereas IES 7 (2020) IES 1: Entry Requirements to Professional 1 addresses CPD. IES 8 also relates to CPD insofar Accounting Education Programs as CPD is the foundation for engagement partners to achieve and maintain the specific competence IES 2, 3, 4: IPD - Technical Competence, required by the standard. 2-4 Professional Skills, and Professional Values, Ethics, and Attitudes The IESs apply specifically to IFAC member bodies, Figure 1. IAESB’s IESs as IFAC’s SMO 2 requires compliance with the IESs. 5 IES 5: IPD - Practical Experience The IESs are still relevant, even if an organization is not an IFAC member because they serve as a benchmark for best practice. IES 6: IPD - Assessment of Professional 6 Competence IES 7: Continuing Professional 7 Development IES 8: Professional Competence for 8 Engagement Partners Responsible for Audits of Financial Statements 1.2.2 Objective of IES 7 (2020) After extensive consultation in 2015 and 2016, the IES 7 (2020) provides a logical flow to the CPD IAESB revised IES 7 by: requirements. Requirements are categorized into four sections: •• Clarifying or amending the requirements, and •• Developing implementation support materials •• CPD for professional accountants (para 9) •• Promotion of and access to CPD (paras 10 & 11) The revised IES 7 is effective as of January 1, 2020. •• Measurement of CPD (paras 12 to 14) “The revision of IES 7 aims to improve the •• Monitoring and enforcement of CPD (paras 15 consistency, quality, and relevance of CPD & 16) undertaken by professional accountants. This serves the public interest by improving the In the following discussion of the revised standard, quality of professional accounting education, and references to the relevant paragraphs of IES 7 (2020) enhancing the professional competence of the are provided in the margin. Brief notes are also accountancy profession.”11 provided as to key changes from the prior version of the standard (IES 7 of 2014). The objective of IES 7 (2020) is: “to establish that professional accountants undertake relevant CPD to develop and maintain professional competence necessary to perform their role as a professional accountant.”12 11 Exposure Draft - Proposed International Education Standard IESTM 7: Continuing Professional Development (Revised), New York: IAESB, 2017, at 4-5. 12 IES 7 (2020), supra note 3 12 1.2.3 Scope and objective IES 7 (2020) prescribes “the CPD required for The role of the PAO professional accountants to develop and maintain Ref: para 1 the professional competence necessary to provide Professional accountants are individually responsible Ref: paras 4, 5 and A5 high quality services to clients, employers, and other for maintaining competence by completing CPD stakeholders, and thereby to strengthen public trust activities, but IES 7 (2020) is addressed to PAOs, in the profession.” rather than individuals, because the PAOs have obligations to monitor and ensure compliance, Aspiring professional accountants develop and are responsible for supporting, facilitating, and competence through IPD while studying and overseeing the competence of members. Having Ref: para 2 training to become professional accountants. Once a solid CPD program in place that is measured, qualified, undertaking CPD activities helps refine a monitored, and evaluated can be an important part professional accountant’s competence in the context of a PAO’s quality assurance program. of the activities and responsibilities they take on as they further their career. A wide variety of relevant The role of an IFAC member body is to: Ref: para 5 activities include: a. Adopt prescribed requirements relating to •• education and training; the development and implementation of appropriate measurement, monitoring, and •• practical experience; compliance procedures, •• mentoring, coaching, and networking; b. Promote the importance of, and a commitment •• observation, feedback, and reflective activities; to, lifelong learning, and and c. Facilitate access to CPD opportunities and •• self-development activities. resources. Ref: paras 2 and 3 In addition to refining a professional accountant’s foundational competence, CPD is also a primary Each of these elements is expanded on and spelled means by which they develop new competencies out in detail within the standard, as discussed next. that support them as they take on new roles. 1.2.4 Overview of IES 7 (2020) IES 7 (2020) states: The standard justifies the need for CPD regardless Ref: paras A7 and A8 of the role, industry sector, or size of organization “IFAC member bodies shall require professional Ref: para 9 worked in. All professional accountants have an accountants to undertake and record relevant obligation of due care which requires underlying CPD that develops and maintains professional competence, and all are subject to public competence necessary to perform their role as a accountability and maintaining public trust. The professional accountant.” standard also recognizes, however, that different CPD requirements may be appropriate for members who Given the emphasis on the importance of CPD, it is are on career breaks, such as on parental leave or on no surprise that IES 7 (2020) mandates IFAC member a leave due to illness. Similarly, members who are Ref: para A15 bodies to require all professional accountants to retired but are still using their designation in some undertake relevant and appropriate CPD. capacity may qualify for reduced CPD requirements, commensurate with their reduced roles. 13 Ref: para A13 In addition, the PAO might find it appropriate to put in place specific or additional requirements related What changed from the prior version? to defined competence areas or roles. This could be This requirement has been brought to the beginning used, for example, for specialist roles (such as tax) or of the standard, and wording has been clarified from Ref: para A8 to highlight areas most relevant to protection of the that in IES 7 (2014). Although there is no longer a public interest (such as professional ethics). direct reference to CPD being “mandatory” for all PAOs often also provide tools to support members professional accountants, the revised standard makes it clear that the expectation hasn’t changed – Ref: para A11 in planning and tracking their CPD activities. These could include resources such as a Competency CPD is expected to be a requirement regardless of Framework, learning plan templates, and tools to industry or organization size. evaluate current competence levels or to provide guidance on areas of focus that correspond to various roles within the profession. 1.2.5 Promotion of and access to CPD IES 7 (2020) states: •• Participating on technical committees; “IFAC member bodies shall: •• Developing and/or delivering learning materials; Ref: para 10 •• Promote the importance of, and a commitment •• Writing research papers, articles, and textbooks; to, CPD and the development and maintenance of professional competence. •• Professional re-examination. •• Facilitate access to CPD opportunities and Such activities are often organized by the PAO, firms, resources to assist professional accountants Ref: para 11 employers, third-party providers, or universities. in meeting their personal responsibility to These are also the activities most commonly undertake CPD that develops and maintains associated with CPD, but there are other learning professional competence.” and development activities that can be relevant to a professional accountant’s career, such as: Ref: para A18 The explanatory material to the standard explains several ways that PAOs can promote CPD, such •• Coaching or mentoring; as by regularly communicating the value of CPD, •• Being coached or mentored; Ref: para A16 encouraging the use of a CPD framework, promoting •• Networking; the variety of CPD opportunities available to professional accountants, and working with •• Reflecting on practical experience and developing employers or regulators to promote awareness PD plans by self-assessing learning needs; and emphasize the importance of CPD as part of a •• Receiving feedback from colleagues and professional accountant’s performance management. supervisors; Some PAOs develop and manage CPD programs that •• Undertaking self-directed and unstructured directly provide members with CPD opportunities. research and study. Ref: para A17 In other jurisdictions, PAOs may not have the means to provide CPD directly, but rather facilitate access These less-structured activities may be coordinated to programs offered by other organizations, such as through the PAO or other organizations, but are often private training providers, universities, or firms and initiated as needed by the professional accountant. other employers with in-house training programs. What changed from the prior version? CPD may be gained through planned, structured Ref: para A18 methods, such as: These two requirements (to promote and facilitate •• Courses, conferences, seminars (in-person or access to CPD) have been pulled under one heading, virtual); and the focus on “development of” competence has been added (rather than just “maintenance of” •• Practical experience and on-the-job training; competence). 14 1.2.6 Measurement of CPD Measurement of CPD includes evaluating evidence In determining which approach(es) to use, the PAO Ref: para A20 that supports the achievement of learning outcomes may consider public interest considerations as well as or the completion of a specified amount of learning the learning and development needs of professional and development activities. Activities can relate to accountants in the jurisdiction, given the range of technical competence, professional skills, and/or roles that professional accountants perform. professional values, ethics, and attitudes. The standard stipulates that member bodies require IES 7 (2020) states: professional accountants to develop and maintain Ref: para 12 professional competence, but the way competence “IFAC member bodies shall establish an approach is to be demonstrated differs, depending on the to measurement of professional accountants’ approach used: CPD 
using the output-based approach, input- based approach, or both.” Table 1. Different ways to demonstrate competence Approach How professional competence is to be demonstrated Ref. Para Output- By achieving learning outcomes relevant to performing their role as a professional 13, A21, based accountant (measurement focus is on what professional accountants achieved from A22 having undertaken learning and development activities). Learning outcomes establish the content and the depth of knowledge, understanding, and application required for a specified competence area. Input- By completing a specified amount of learning and development activity relevant to 14, A24, based performing their role as a professional accountant (measures CPD in terms of hours A26 or equivalent learning units). Professional accountants are required to complete a specified amount of relevant learning activities per year or over a rolling period of time; limits may be stipulated on specific activities undertaken more than once. Output-based approaches used. Some PAOs, for instance, count each 50-minute block as a “unit,” while others round up seminar times Output-based approaches are focused not on “What to the nearest hour, allowing for networking breaks. activities have been undertaken?” but rather, “What Although input-based methods remain very common, are the results of those activities?”. Output-based they have the potential downside of reflecting “form approaches have the significant advantage of more over substance”, as they do not directly assess the directly measuring competence, but they are harder actual development or maintenance of competence to assess reliably, as competence achieved is a more that results from the activities undertaken. subjective measure than hours of CPD attended. When using an input-based approach, it is essential that the underlying objectives be kept in mind. In other words, members need to be reminded that the objective of CPD is not to sit in seminars for a certain Input-based approaches number of hours, but rather to maintain and/or gain competence. Focusing only on completed hours runs Input-based approaches gained their popularity the risk of adopting a checkbox mentality – collecting because of the relative administrative ease in hours based on what is easiest or least expensive measuring and monitoring the learning activities to achieve compliance with the requirements, as completed. These systems typically set requirements opposed to planning and reflecting on what is most based on hours, but other equivalent units can be effective and relevant for their professional career. 15 Using both approaches Combining elements from input- and output-based achievement of “competence” in general. PAOs were approaches allows a PAO to incorporate some of the challenged to measure overall competence on the benefits of output-based models, but reduces the basis of CPD; this clarifies that it is specific, relevant administrative burden through some input-based learning outcomes for the activities that are being components. For example, if a PAO is looking to measured against. move towards an output-based approach, they may start by requiring members to plan their CPD With respect to using an input-based approach, based on the outcomes/competencies they want to the revised standard removes the requirement for achieve, and self-assess their achievement through PAOs to stipulate 120 hours of CPD activities over a reflective activities . This incorporates some elements three-year rolling period, with 60 of the hours being of an output-based approach, while still retaining verifiable. There is also no longer a 20-hour minimum the input-based element of measuring and verifying annual requirement. The specific number of hours has CPD through completed hours or equivalent units. been replaced with the more general requirement for As another example, a PAO may follow an input- “a specified amount”. Some stakeholders disagreed Ref: para A25 based approach, but allow non-compliant members with removing the specific requirement from the to provide evidence that they have developed and input-based standard, even though this is more in maintained competence through an output-based line with a principles-based approach. To address approach. their concern, there is a new guidance paragraph that describes the “120/60” approach as common: What changed from the prior version? “A25. IFAC member bodies using an input-based approach expect professional accountants to Recall that IES 7 (2014) includes a “combination develop and maintain professional competence, approach” in addition to the input- and output- through the undertaking of a specified amount Ref: para A25 based approaches. The revised standard removes of CPD. For example, an IFAC member body the combination approach as a separate and distinct may set a requirement of at least 120 hours (or method, and clarifies that either or both approaches equivalent learning units) of relevant CPD in each can be used. rolling three-year period, of which 60 hours (or equivalent learning units) would be verifiable; and Within the output-based approach, the revised a minimum of 20 hours (or equivalent learning standard focuses on the demonstration of units) of relevant professional development “achievement of learning outcomes” rather than activity in each year.” 1.2.7 Monitoring and enforcement of CPD Ref: paras A28 and A29 Once a PAO has determined its requirements and Verifiable evidence is “objective, and capable measurement approach, IES 7 mandates that: of being proven and retained.” PAOs often have requirements or guidance for members’ retention “IFAC member bodies shall: Ref: para 16 Ref: para 15 and provision of evidence with respect to types of •• specify the nature and extent of verifiable evidence deemed acceptable and retention terms. evidence that professional accountants are required to maintain for CPD that has been Ideas for verifying CPD under each approach are undertaken. listed in Table 2. •• establish a systematic process to (a) monitor Some learning activities can be measured but not Ref: para A30 whether professional accountants meet the easily verified, such as on-the-job training, coaching, IFAC member body’s CPD requirements, and and mentoring. These activities can still contribute to (b) provide appropriate sanctions for failure to learning and development, and can be evidenced meet those requirements.” and documented. 16 Table 2. Different ways to demonstrate competence Output-based Input-based Examination results Course outlines and teaching materials Specialist or other qualifications Storyboards (for virtual training) Assessments of the acquisition of technical Meeting agenda objectives and meeting minutes that Ref: para A31 competence, professional skills, professional values, verify the relevance of the content Ref: para A32 ethics, and attitudes for specified learning outcomes Records of work performed that have been verified Confirmation that a learning and development activity against a competency map has been completed (including number of hours or equivalent learning units) by a provider, instructor, employer, mentor, or tutor Objective assessments of performance or behavior against a competency map Published material A systematic monitoring process may include: While encouraging compliance is essential, sanctioning non-compliance is also necessary to Ref: paras A38- A41 •• Requiring periodic member declarations of Ref: paras A33 to A35, and A42 ensure that the CPD requirements are taken seriously compliance; by members. PAOs should aim to specify sanctions •• Reviewing and assessing member CPD learning that strongly motivate compliance without being plans; excessively punitive. Willful disregard on the part of a •• Auditing CPD records and supporting records member may justify disciplinary action; depending on (can be risk-based, sampled, cyclical, etc.); the legal authority, the appropriate disciplinary action for willfully failing to comply with CPD requirements •• Working with regulators and employers that assist may include expulsion from membership. in monitoring compliance; •• Reporting publicly the extent to which members What changed from the prior version? Ref: paras A31- A32 comply. Paragraph 15 is a new requirement. As in IES 7 (2014), Ref: para A36 guidance with respect to types of verifiable evidence If cycles are used for monitoring, experience under each approach are provided in paragraphs suggests that cycles of between one and five years A31 and A32. may meet the public interest and the expectations of stakeholders such as regulators. IES 7 (2020) recognizes that the public is best served Ref: para A37 by bringing non-compliant members into compliance on a timely basis. It is therefore important that PAOs devote adequate resources to compliance programs. This may include having a board or committee of members that oversees CPD. 17 1.2.8 CPD framework IES 7 (2020) contemplates PAOs providing their Ref: paras A10 and A16 members with a CPD Framework, which represents a process for members to follow in planning and completing their CPD. A sample CPD Framework, based on the guidance in paragraph A10, would Self- look something like Figure 2. assessment Figure 2. Sample CPD Framework Performing self-assessment activities can help members identify gaps in their professional development and determine learning outcomes Revise plan Plan CPD that are relevant to them. Based on the desired learning outcomes, the member can then prepare CPD an individual CPD plan. Throughout the CPD cycle, Framework they complete and record learning and development activities. As activities are completed, the member should undertake reflective activity on completed learning and development activities and evaluate Complete the extent to which expected outcomes have been Reflective & record achieved. This will allow them to revise their learning activity CPD and development plan accordingly. We’ll revisit this sample CPD Framework in Part 3.2.2, when we discuss guidance and tools to support compliance. 1.2.9 Implementation support materials The IAESB has developed and made available a A summary of the available implementation support set of support materials that provide guidance materials is available at https://www.ifac.org/system/ on the new standard, to increase consistency of files/publications/files/IAESB-IES-7-Implementation- understanding, adoption, and implementation of Support-Materials-Overview.pdf. the principles and requirements of IES 7 (2020). These materials are beneficial to both developing In addition, the IAESB has made available a short and well-developed organizations during initial roundtable video discussion highlighting changes implementation and ongoing maintenance and and their implications; see https://www.youtube. monitoring of CPD systems compliant with the com/watch?v=FJP5F90HLcg. standard. These resources are available at: https:// www.ifac.org/publications-resources/ies-7- continuing-professional-development-revised. 18 1.3 IES 8 – Professional Competence for Engagement Partners Responsible for Audits of Financial Statements13 In Part 1.2.4 of this Guide, it was noted that there may The Engagement Partner responsible for audits of be a need to implement specific CPD requirements financial statements is “the partner or other person in for professional accountants in roles deemed to the firm who is responsible for the audit engagement require specialized competence and/or for roles that and its performance, and for the auditor’s report Ref: para A1 are higher risk in terms of public protection. Arguably, that is issued on behalf of the firm, and who, where this includes the role of an audit engagement partner, required, has the appropriate authority from a and IES 8 provides the supporting rationale for this professional, legal, or regulatory body.” assessment. The learning outcomes specified in Table A of the IES 8 states that Standard relate to: IFAC member bodies shall require professional •• technical competence (including the key technical accountants performing the role of an Engagement areas of Audit and Financial accounting & Ref: para 8 Partner to: reporting, as well as broader business areas such as IT, Governance, Finance, Tax, Law, etc.); •• …develop and maintain professional competence that is demonstrated by the •• professional skills; and achievement of learning outcomes including, but not limited to, those listed in Table A. •• professional values, ethics, and attitudes. Ref: para 9 •• …undertake CPD that develops and maintains Although these learning outcomes cover the same the professional competence required for this domains as those in IESs 2 to 4, they go beyond what role. is required during pre-qualification. See Part 3.3.1 for more detailed guidance on the learning outcomes required by Engagement Partners. 1.4 CPD and Competency Frameworks As previously discussed, the underlying reason facilitated by having a local Competency Framework. and importance of CPD is to maintain and enhance The competencies required of a professional professional competence. Measuring and tracking accountant are used to define and establish the valid the competence of professional accountants is scope of CPD learning outcomes. 13 IES 8 is available as part of the “IAESB IESs”, supra note 4. 19 1.4.1 What is a Competency Framework? A Competency Framework (sometimes also called Technical Areas Enabling Areas a Competency Map) describes the expected Professional and ethical competence of a PAO’s members. An organization’s Financial reporting behavior Competency Framework includes the domains Strategy and Problem-solving and (or subject areas); the competency statements Governance decision-making comprising each domain and their related levels of proficiency; and the knowledge topics that underlie Management Communication each competency statement. This Framework can accounting then be used to map the education, examination, Audit and assurance Self-management practical experience, and CPD requirements of the Finance Teamwork and leadership PAO, and to design and explain the linkages between Taxation elements in a program of professional studies as well as the ongoing competence expectations. Other domain breakout options are equally valid, COMPETENCY FRAMEWORK provided they cover the full scope of what is expected Figure 3. Competency Framework elements of professional accountants in the jurisdiction. e.g., Financial Within each domain, a number of sub-domains are COMPETENCY Accounting, used to classify the competency statements, and DOMAINS Audit, Strategy, each competency statement is assigned a proficiency Communications level to indicate whether the competency is expected at an introductory or advanced level, or somewhere e.g., Develops between the two. COMPETENCY LEVELS OF the audit plan at STATEMENTS PROFICIENCY Level B e.g., ISA 300, Materiality, KNOWLEDGE TOPICS Scope and timing For completeness, competency domains that provide structure for the Framework should represent the full scope of the technical and non-technical (enabling) areas expected of all professional accountants. CPA Canada, for example, uses the following domains in its Competency Map14: 14 CPA Canada, The Chartered Professional Accountant Competency Map: Understanding the Competencies a Candidate Must Demonstrate to Become a CPA (2019), online: CPA Canada . 20 For example, an excerpt from CPA Canada’s 1. PROFESSIONAL AND ETHICAL BEHAVIOUR Competency Map 15 includes the following 1.1 Uses an ethical reasoning process. competency statements in the domains of Financial Reporting (a technical domain) and Professional 1.1.1 Identifies situations involving existing or and Ethical Behaviour (a non-technical, or enabling, potential ethical issues. domain): 1.1.2 Clarifies and uses appropriate professional domain values for choosing or recommending an ethical 1. FINANCIAL REPORTING course of action. 1.2 Accounting Policies and sub-domain 1.1.3 Reports ethical issues to higher levels of Transactions management, legal or regulatory authorities, or others when appropriate. competency 1.2.1 Develops or evaluates statement … appropriate accounting policies proficiency and procedures (A) Note that in the CPA Canada Competency Map, level there are no proficiency levels for enabling 1.2.2 Evaluates treatment for routine transactions competency statements as these are all expected (A) to be demonstrated at a mastery level. 1.2.3 Evaluates treatment for non-routine transactions (B) 1.2.4 Analyzes treatment for complex events or transactions (C) … 1.4.2 How PAOs use Competency Frameworks to support CPD Competency Frameworks are primarily used for learning activity to the Competency Framework, they developing a PAO’s certification program, but they can show that the activity reflects relevant learning. are instrumental for CPD as well. A Competency The Framework can also help members plan their Framework distinguishes the boundaries of CPD activities by providing learning outcomes and what is relevant learning for CPD because the minimum proficiency levels for members to use in Framework covers the full scope of professional performing a self-appraisal and gap analysis. From a competence. In other words, if a member is unsure monitoring perspective, mapping learning activities whether a particular learning activity is relevant to and outcomes against the Framework increases the their professional development, they can refer to verifiability of evidence. the Competency Framework. If they can map the 15 Ibid at 12 and 22. 21 1.4.3 If a Competency Framework has not been established For a comprehensive discussion of developing and using Competency Frameworks, please see Competency-based Accounting Education, Training & Certification: Implementation Guide16, published by the World Bank Centre for Financial Reporting Reform. If your organization doesn’t have a Competency Framework, consider using the learning outcomes in IES 2, 3, and 4 (and IES 8 for Engagement Partners). These learning outcomes provide the basic scope of expected competence for technical competence areas, as well as professional skills, values, ethics, and attitudes. Remember, however, that the proficiency levels in IESs 2 to 4 are assigned to competence areas and are established as minimums at the completion of IPD. For CPD purposes, you may want to consider adjusting proficiency levels upward as appropriate in your context. Some organizations will also increase the levels based on where their members are working. For example, an audit chamber may set higher proficiency levels for assurance and financial reporting. See Part 3.3.1 for an example of using the IESs to design the scope of CPD offerings. 16 Alfred Borgonovo, Brian Friedrich, & Michael Wells, Competency-Based Accounting Education, Training & Certification, Washington: The World Bank, 2018. [“CBAETC Guide”]. Available online . 22 PART 2 CPD Strategy, Structure, and Policies Highlights of Part 2 An effective CPD program is one that is designed not only to meet international standards and best practice, but just as importantly, to be sustainable in the local environment. Part 2 covers: •• Performing an environmental analysis to understand the regulatory environment operated within, and the resulting impacts on program scope and collaborative partnerships required; •• Performing strategic planning with respect to CPD, based on obligations and opportunities; •• Designing PAO governance structures and mechanisms to establish, promote, and support CPD policies; •• Setting CPD requirements and policies in compliance with international standards, best practice, and organizational strategy; •• Customizing requirements based on current strengths and weaknesses of member competence as evidenced by a training-needs analysis or gap analysis; •• Considering whether different or additional requirements should apply to specialist roles (such as auditors, tax advisors, etc.); •• Determining the extent of flexibility in learning activities to offer members; •• Choosing between input-based, output-based, or combined approaches to measuring CPD; •• Establishing accountability policies for CPD reporting and enforcement (high-level only at this point, details will be covered in Part 3). Key questions addressed in Part 2 •• What strategic decisions need to be made to set up a CPD program? ? •• What factors impact CPD strategy? •• What considerations are there for organizational structure in relation to a CPD program? 24 2.1 Strategic decision-making for CPD programs With respect to strategy and structure decisions, the main focus of this Guide is PAOs and the decisions Figure 4. Context for strategic they need to make to design and implement their University Firm PAO CPD programs. However, the ideas also apply to decision-making firms or other organizations setting up an in-house training program that will provide education and training for professional accountants. In addition, in some jurisdictions, universities may provide training to professors and other educators using a CPD program. As you read the guidance provided, consider how it can be applied within your own Partners Members Educators organization. & staff & students The strategic decision-making process in this area can be described as follows: Determine authority & obligations (see decision-making process 1 2.1.1) Figure 5. Strategic Define roles for oversight & 2 accountability (see 2.1.2) 3 Determine strategy (see 2.1.3) 2.1.1 Determine authority and obligations When developing and implementing a CPD •• whether a decision by a committee, the Board, or program, an organization needs to fully understand a vote of the membership is required to introduce the regulatory environment in which it operates and or amend CPD requirements. the resulting impact on the program scope and collaborative partnerships required. Accordingly, All of the strategic decisions tie back to the answers your first step should be to assess the organization’s to two key questions: regulatory environment, by determining: •• “What can we do?”(opportunities); and •• the organization’s obligations for CPD; •• “What must we do?” (obligations). •• its authority to implement and enforce CPD policies; As previously discussed (Part 1.1.5), in some •• if there are identified gaps in authority or scope, jurisdictions, the responsibility and authority for the cooperative agreements or partnerships requiring CPD may be split between the PAO and needed to fill those gaps; and another organization, such as a government body. 25 PAOs without sole authority are still expected to Partnerships and cooperative agreements can use best efforts to comply with IES 7 (2020), but if provide the means of implementing effective CPD authority is shared, there will be a need for more programs under shared authority. Establishing collaboration to achieve best practice and meet such relationships is also beneficial where there the standard. Ultimately, because maintaining are significant resource constraints (which may, professional competence is such a fundamental for example, lead to a PAO partnering with one of part of protecting the public interest, some sort more universities to develop and deliver its CPD of CPD requirement is an obvious necessity. The curriculum) or simply for efficiency and consistency logistics of which group actually has the authority (which may, for example, result in one or more to implement the requirement is what may differ national or regional PAOs cooperating with one between jurisdictions, but it is in everyone’s interest another on establishing standards and managing to ensure that adequate requirements are in place the CPD program). and are being effectively monitored and enforced. 2.1.2 Define roles for oversight and accountability CPD is a core responsibility of a PAO. Depending Before attempting to determine CPD strategy, the on the governing statutes and regulations for the organization should ensure that its governance PAO that relate to its funding, CPD can also be an structure will support CPD-related strategic important potential source of revenue to offset costs planning and program implementation. A PAO and fund additional initiatives. Because of the extent should both clarify the roles played by its Board, of responsibility and opportunity associated with staff, and committees, as well as understand how CPD, it is important to make sure that CPD strategy other stakeholders (such as other organizations is embedded in the organization’s governance or government ministries) are involved in setting, mechanisms. implementing, monitoring, and enforcing CPD policy. A complete assessment of the governance and operational structure of the PAO may be required in some cases. 2.1.3 Determine strategy Strategic planning depends heavily on including the Before embarking on this important initiative, it will right team throughout the planning process. The be essential to ensure the resources are available to PAO will likely want to include representation from: see it to its conclusion. The PAO should estimate the financial and human resources required. The capacity •• its Board (or equivalent oversight body); of educators, administrators, and work supervisors to •• senior management; be included in the project should also be considered. •• key volunteers who may be (or may become) There are a number of strategic decisions to be committee members; made with respect to CPD. Some key decisions are •• recognized educators and trainers; provided in the section below, along with some of •• employers. the main factors that should be considered when working through the decisions. 26 Once the original CPD strategic plan has been For example: agreed upon, periodic sessions should be used to adjust the plan to better meet obligations and take •• Input-based, output-based, or a combination of both approaches? (refer to Part 1.2.6 for strengths advantage of opportunities. and weaknesses of the approaches) Also, regular consultations with members are critical •• What specific requirements will be introduced? to prepare them for the introduction of or changes How many hours/units (if choosing an input-based to CPD requirements. These consultations can approach)? What are the member’s obligations also provide valuable feedback on addressing the for demonstrating achieved learning outcomes perceived burden the new CPD requirements could (if choosing an output-based approach)? create for the members, and help educate members (and the broader community) on their usefulness and •• What, if any, exemptions will be permitted from the CPD requirements? (e.g., retirement, family importance for the profession as well as the public. leave) Important factors for consideration: Key strategic decisions and decision •• Decision re: input vs. output-based will drive minimum requirements
(e.g., input-based could factors require a minimum of 120 hours over 3 years…). •• Current competence of members (actual and I. Standards and requirements to comply with perceived); lower competence may warrant Identify the standards the organization must comply higher requirements. with and the ones it may comply with voluntarily •• ategories of membership and areas of C based on the opportunities that are provided as a employment. Accountants employed in public result. practice, government, small and medium businesses, and academia have different needs For example: and opportunities in the area of CPD. •• IES 7 (2020) – minimal compliance or go beyond? •• Current commitment level of members to •• IES 8 – minimal compliance or go beyond? maintaining competence. •• Other standards? (e.g., EU Audit Directive) •• Familiarity of members with CPD concepts (it •• Internal requirements? (e.g., Firm and university is more difficult to understand and evaluate policies for education and training of professional compliance with an output-based approach if members) members are unfamiliar with concepts and have difficulty demonstrating outcomes). Important factors for consideration: •• Ability of organization to facilitate an output-based approach by assessing competence directly (e.g., •• Standards that are currently mandatory; through periodic testing of members, practice •• Standards that are foreseen as becoming review results, etc.). mandatory in the future; •• Current and/or desired IFAC membership status; Note: If the organization has developed a Competency Framework and is implementing competency-based •• Extent to which market recognition is needed for education and training, performing a gap analysis is legitimacy/reputation; a central part of that process, which will also inform •• Pressure and/or opportunity for global the needs for CPD.17 partnerships/collaboration. III. Additional requirements stipulated II. Measurement approach and basic requirements Determine the extent to which requirements will be extended beyond what is included in IES 7 (2020). Decide on the CPD approach to use and the fundamental requirements to place on members. For example: •• Will there be mandatory competency areas that must be part of each professional accountant’s CPD? (e.g., ethics, auditing, tax) 17 See, for example, Stage 2 in ibid. 27 •• Should there be additional requirements for Important factors for consideration: “specialist” roles? (e.g., for auditors, tax advisors, engagement partners) •• M embers’ perception of CPD – a valuable activity or just rules to be complied with? (i.e., are members willing to pay for quality CPD to Important factors for consideration: maintain competence and advance their careers?) •• Competence gaps based on research (e.g., gap or •• Are there other reputable sources of CPD training needs analysis), member input, discipline training available? (if not, the PAO will have more cases; if weaknesses have been noted in specific obligation) competency domains, requirements should address this. •• Can the quality of CPD provided by other organizations be evaluated and controlled by •• Public perception (e.g., does organization need the PAO? to be seen as more committed to ethics?). •• Is there a market from non-members? (if so, this •• Decisions regarding IES 8 compliance and can subsidize member costs and/or generate expectations to be placed on engagement additional revenue for the PAO) partners. •• If CPD is permitted and intended to be a “profit •• Relative “power” of the organization versus centre,” are there also low-cost or free options members – will there be resistance from members, available for members to reduce the cost burden and how will it be managed? for those with financial constraints? In mature PAOs, members are often highly resistant V. Flexibility allowed to additional requirements that they find onerous – such as periodic reassessment. On the other hand, Establish the level of structure imposed with respect most members support requirements that are to the allowable learning activity content, format, reasonable and are clearly in the public interest. For and source. example, a PAO may receive little pushback when implementing a mandatory ethics requirement, as For example: long as the requirement is not unreasonable, and •• Will specific content areas be prescribed or the PAO can communicate the benefits and value. are members generally allowed to determine relevance? IV. Role of PAO/Organization •• Are only formal seminars permitted or do other Determine positioning on the spectrum from “direct learning activities qualify (e.g., acting as mentor/ CPD provider” to “CPD access facilitator.” mentee, new job responsibilities, volunteer committee work etc.)? For example: •• Will CPD completed through other organizations •• What, if any, CPD will be provided directly to qualify or is only PAO-provided CPD allowed? members by the organization rather than by a third party? •• W ill in-house training programs delivered by employers (sometimes referred to by PAOs •• To what extent does the organization facilitate as “approved employers”) be recognized and access to CPD provided by other organizations? supported? •• What stakeholders should be partnered with to facilitate compliance with standards and See Part 3.3.2 for guidance on determining allowable requirements? options for CPD formats. •• Is CPD a “profit centre” to offset other Important factors for consideration: organizational costs and/or fuel professional growth and innovation, or is the department •• Decision made regarding input, output, or expected to break even? combination approach (e.g., acting as mentor/ mentee, new job responsibilities, etc. are easier •• Is providing CPD a free service for members, a to include in output and combination models); subsidized service, or do members bear the full cost? •• Extent to which organization needs to control supply (based on quality concerns or finances); See Part 3.3.3 for more detail on partnering and •• Internal capacity to develop and deliver courses; options for developing/facilitating access. •• Additional perceived benefits from using partners (building relationships and capacity in other areas) compared with internal development (and the added control over messaging to members). 28 Note regarding finances and maturity of organization •• What process will be established for pursuing – if the PAO is relatively new to CPD, they may only non-compliance (e.g., administrative or full ethics be able to make CPD offerings financially viable if process)? they control the CPD program entirely and don’t offer much flexibility. Once the program is more •• What sanctions will be enforced for non- compliance (requirement to improve conduct, established, more flexibility may be possible. fines, suspension or expulsion from membership or public practice)? See Parts 3.4 and 3.5 for more detail on monitoring VI. Accountability and enforcement. Mechanisms for reporting, monitoring, and enforcing compliance. Important factors for consideration: For example: •• Organizational resources available to develop and support online/flexible reporting (e.g., web •• How will learning activities be reported to the development, help desk); organization (paper-based or online)? •• Audit sample type and size needed based on •• How much detail will be required to be reported expected or known risks; (for verifiable and non-verifiable)? •• Legal requirements for disciplinary processes; •• How will compliance be monitored (auditing •• Authority for issuing sanctions. sample of members or activities)? •• ho will perform the audits: staff, board/ W committee members, volunteer members? 2.2 Organizational maturity as a consideration for CPD strategy 2.2.1 What is meant by “maturity” of a PAO? When undertaking strategic planning with respect •• Board and staff expertise and experience; to CPD, many of the considerations that impact decision-making are tied to the organization’s •• Availability of human resources; “maturity.” Maturity of a PAO reflects more than just •• Public perception and level of trust. how long it has been in existence, and encompasses characteristics such as: More mature organizations generally have more •• ecognition accorded by government (e.g., level R authority to impose CPD requirements on their of authority granted); members, and at the same time have the means to develop and maintain a robust CPD system. In •• Autonomy; addition, they have a greater level of legitimacy and •• Financial stability; respect to encourage member buy-in and ultimately enforce compliance. •• Robustness of existing systems; 29 2.2.2 Measuring PAO maturity The Confederation of Asian and Pacific Accountants For each of the 16 KSAs, the levels of maturity are (CAPA) has developed a Maturity Model18 to help described for a number of aspects called “attributes.” PAOs measure and monitor their maturity level. The The attributes related to CPD are presented in model provides a support tool that allows PAOs Table 4. to take a systematic approach to organizational development, and go at their own pace. The model provides a holistic framework with a user-friendly Figure 6. CAPA Model Level of Maturity interface, that PAOs can interpret within their own 1 AD HOC OR NO PRACTICES context and scale to suit their needs. The CAPA model includes sixteen Key Success Areas 2 INFORMAL PRACTICES (KSAs) across four broad characteristics: sustainability, relevance, professionalism, and member value. See Table 3. 3 GOOD PRACTICES CPD is a KSA included in the Member Value characteristic. CAPA has also developed a series of 4 STRONG PRACTICES guidance documents that focus on specific KSAs: The Maturity Model in Action – Continuing Professional Development19. 5 BEST PRACTICES The CAPA model includes 5 levels of maturity, described in general as ranging from no practices to best practices. Table 3. CAPA Model Key Success Areas20 Characteristic Key Success Areas Description Legal & Market Recognition An acknowledged reason to exist Governance Oversight, direction, and control arrangements SUSTAINABILITY Funding & Business Model A strategy and plans for long-term viability Infrastructure & Management Appropriate systems, processes, and people Membership Criteria for admission and levels of membership Member Involvement Member needs and views understood RELEVANCE International technical standards adopted and Standards* implemented Public Interest Generates benefits for all society 18 Confederation of Asian and Pacific Accountants, Maturity Model for the Development of Professional Accountancy Organisations, Kuala Lumpur: CAPA, 2017 [“CAPA Maturity Model”]. Available online . 19 Confederation of Asian and Pacific Accountants, The Maturity Model in Action: Continuing Professional Development, Kuala Lumpur: CAPA Guidance Series for the Development of Professional Accountancy Organizations, 2017, at 6 [“CAPA MMA”]. Available online . 20 CAPA Maturity Model, supra note 16 at 10. 30 Table 3. CAPA Model Key Success Areas Characteristic Key Success Areas Description Ethics* Established standards of conduct for professionals Quality Assurance* Standards for delivering services to the public PROFESSIONALISM Investigation & Discipline* Maintains standards of membership Professional Qualification* Established required-competency benchmark Continuing Professional Supports member competency Development* Member Services Responds to member needs: provides value MEMBER VALUE International Relationships Internationally connected and continually improving Advocacy & Influence Recognized voice on topics of relevance * These KSAs link to IFAC’s SMOs In the review of attributes and examination of how members, such as online courses, and have approved the maturity levels are described, the ties to the trainers that have been vetted by the PAO. They have requirements of IES 7 (2020) should be apparent. a dedicated CPD staff, making them less reliant on For example, more mature organizations are better volunteers. All-in-all, developing to a higher maturity able to promote and support the importance of CPD level provides a positive impact on a PAO, including and have more robust systems for monitoring and in the area of CPD. enforcement. They tend to offer more options for Table 4. CAPA Model Attributes for CPD21 As- Staffing and Policy Programs and delivery SMO compliance pect oversight 1 No CPD system Volunteer-led Limited and ad hoc training courses Not active and sponsored Volunteer trainers 2 CPD is voluntary Limited staff Informal planning and delivery of Considering how focus training program to address the Program influenced by supply and requirements of not demand SMO 2 Training materials accessed from other PAOs Quality of training inconsistent and not measured Courses generally provided for free or nominal amount 21 CAPA MMA, supra note 17 at 7. 31 Table 4. CAPA Model Attributes for CPD As- Staffing and Policy Programs and delivery SMO compliance pect oversight 3 CPD policy Specific staff Reasonable training program Has a defined plan established focus established to address the Policy not Links established with universities requirements of monitored and other training suppliers SMO 2 Active promotion Some regular, competent presenters of CPD and its identified importance Course fees generally charged 4 Policy monitored Dedicated staff Comprehensive training program Executing and established Pool of competent trainers identified implementing the CPD committee requirements of involvement SMO 2 5 Policy monitored Comprehensive Dynamic program: topics regularly Ongoing and non- reporting evaluated and prioritised commitment compliance to board or Trainer accreditation requirements to continuous addressed via council implemented improvement investigation and in addressing Online CPD to support extensive discipline requirements of program SMO 2 Learning outcomes verified and measured 2.3 Developing policies Revisiting the strategic decision-making process from If a typical governance structure is being followed, Part 2.1, once your organization has settled on its management will develop policies with oversight strategy with respect to CPD, the next step is to set and approval, as needed, from the Board. Policies policies that align with and support the strategy. ultimately need to align with the strategic decisions made, but if a PAO is implementing a CPD program for the first time, short- and long-term strategies may Figure 7. Strategic decision-making Determine authority & obligations (see 1 differ and iterations may be required to get to the 2.1.1) desired end point. For example, the organization may have decided that in the long-term a robust set process expanded Define roles for oversight & of internally-developed resources will be provided, 2 accountability (see 2.1.2) but that the starting point will be to provide these through partnering or outsourcing. In this situation, policies would also need to reflect these short- and 3 Determine strategy (see 2.1.3) long- term goals, with a plan to move forward. Policies need to be set for all of the key strategic Set policies to align with strategy (see decisions. Examples of policies based on the key 4 strategic decisions from Part 2.1.3 are presented in 2.3) the section below. 32 When choosing policies, it is important that they Examples of CPD baseline policies to are balanced. Policies must be sufficiently rigorous align with PAO strategy and detailed to effectively ensure that member competence is appropriately developed or maintained, while also being operationally efficient I. Compliance with standards and requirements and sustainable. For example, in an effort to be Policies regarding: rigourous and reflect the importance of CPD, it may be decided that all CPD shortfalls by members will be •• Means of monitoring compliance with standards the PAO must (or has chosen to) comply with; referred to the full ethics investigation and discipline process. From a practical perspective, however, it may •• Reporting PAO compliance – both internally to be prudent to provide first-time or minor offenders Board and externally to oversight bodies. with a warning and a short grace period during which they can correct the shortfall to avoid overwhelming the ethics and discipline team. At the same time, of II. Measurement approach and basic requirements course, this would not be a member-facing policy For input-based, policies regarding: such that it encourages non-compliance. •• What constitutes “verifiable” PD; The “Take your Medicine” problem •• How to classify study time outside of the classroom for university and other courses; PAOs are obligated to establish and enforce CPD •• How hours are allotted for preparing and requirements, but members may not see the benefit presenting educational sessions (new and repeat or importance of CPD. To overcome this, the PAO sessions); should educate members and provide as much value as possible, but recognize that the profession’s and •• Maximum hours/units allowable for activities such as Board or committee service, or significant organization’s overriding obligation is to ensure changes to a role at work. members act in the public interest. This means that members’ self-interest is a secondary concern to the interest of the public. For output-based, policies regarding: •• Planning and tracking processes expected of For example, imagine that the PAO’s Board decided members; that students are required to complete a mandatory ethics and professionalism course within the year •• Activities recognized/not recognized as before they are granted full membership. Some supporting learning outcomes. students may resent having to complete what may be seen as an additional requirement, particularly Regardless of approach, policies regarding: if students in other jurisdictions don’t have similar requirements. The PAO will, of course, hope that •• Criteria that triggers commencement of CPD the new course is well-received and well-rated by requirements as a member (e.g., on date of candidates. But even if not they must enforce its designation or beginning of next calendar year); completion in line with the PAO’s obligation to ensure •• Allowable reductions/exemptions permitted that candidates receive the training deemed to be for retired members, those on retirement family important for them as new professionals. leave, etc.; •• Criteria for appropriate supporting evidence of completion and how long this must be maintained. 33 III. Stipulate additional requirements V. Flexibility allowed (allowable learning activity content, format, and source) Policies regarding: Policies regarding: •• Criteria that trigger additional requirements (e.g., within first year of membership, entering public •• Criteria for acceptable activities not offered by accounting, on becoming a partner in an audit the PAO (external providers, mobile and online firm); courses, self-study); •• Amount and time period for content-related •• Evidence required to support activities (certificate requirements (e.g., 4 hours of mandatory ethics- of completion from approved training provider, related content in each 3-year rolling cycle, 3-hour detailed personal log of time spent and/or taxation update each year). learning outcomes achieved, how learning is applicable to the member’s work environment). IV. Role of PAO/Organization (“direct CPD provider” or “CPD access facilitator”) VI. Accountability (reporting, monitoring, and enforcement) If the PAO is to be a direct CPD provider, policies regarding: Policies regarding: •• Fee structure for offerings; •• Member reporting schedule, format, and detail required; •• Criteria for selecting course topics; •• Criteria for hiring and remunerating course •• How long evidence of completion must be retained by the member; developers; •• Criteria for hiring and remunerating presenters •• Audit approach (e.g., sampling %, risk factors leading to automatic audit); and facilitators; •• Venues selection; •• Classification of a breach as an administrative or full disciplinary matter (e.g., first-time offense •• Attendance tracking (sign-in/sign-out/random results in requirement to improve conduct and a time during course); small fine, whereas repeat offenders trigger more •• Assessment of learning outcomes (e.g., quizzes, formal disciplinary process with potential for more participation requirements); significant consequences); •• Feedback and review and continuation of course •• Range of sanctions for non-compliance (including and facilitators. for insufficient CPD, as well as for filing late or failing to report); If the PAO is to be a CPD access facilitator, policies •• Allowable remediation activities and required regarding: time frame; •• Criteria for approving training organizations; •• Reporting member compliance (both internally to Board and externally to members, oversight •• Criteria for approving course content; bodies, the public). •• What constitutes satisfactory evidence of completion (attendance, successfully passing an Also see Parts 3.4 and 3.5 for more detail on evaluation); monitoring and enforcement. •• Feedback and review and continuation of training organizations and allowable courses. See Part 3.3.3 for more detail on setting these policies. 34 2.4 Considerations for organizational structure Once policies have been established, the PAO should Determine authority & obligations (see Figure 8. Strategic decision-making process revisit its governance and operational structures to 1 2.1.1) ensure that the strategic decisions and resulting policies are well-supported by the organizational structure, that roles are sufficiently defined, and Define roles for oversight & 2 that there are enough resources available for accountability (see 2.1.2) implementation. expanded Based on the strategic decisions and policies 3 Determine strategy (see 2.1.3) established, the PAO should: •• Ensure there are clear definitions of Board, committee, and staff roles for this area; Set policies to align with strategy (see 4 2.3) •• Consider if any changes are needed to the Board’s mandate; Adjust governance and operational •• Determine if an existing committee can 5 structure (see 2.4) accommodate additional responsibility into its mandate or if a new committee is needed, and ensure the committee is adequately resourced; •• Formalize cross-department linkages as needed (e.g., education, ethics and discipline, member services); •• Formalize the frequency and expectations for reporting to the Board as well as to external stakeholders. Overall, the PAO’s governance system must support the CPD program as it does other programs. Because CPD needs to be tied into compliance, discipline, and enforcement, it should have committee and/or Board oversight. Careful attention must also be paid to ensuring that the full operational cycle for CPD (as presented in Part 3) is being adequately resourced. 35 PART 3 Administration, monitoring, and enforcement Highlights of Part 3 With CPD as a mandatory requirement for all professional accountants, CPD programs must be relevant and practical for members who are subject to the requirements. Moreover, ongoing monitoring and enforcement mechanisms are essential. Part 3 explores the administrative systems and processes supporting the CPD function, including: •• Communications with members (regarding requirements, offerings, etc.). •• PAO support of the CPD Framework (e.g., support in assessing skills gaps, for reflective activity, and for recording CPD learning activities, etc.). •• Planning and developing a CPD catalogue of offerings . •• Development options: {{ “In-house” development and delivery of CPD by a PAO. {{ Outsourcing to subject-matter experts. {{ Accrediting CPD providers. {{ Partnering with external providers, such as universities and commercial training enterprises. •• Managing course delivery (contracting facilitators, arranging venues and services, managing registrations, printing materials, etc.). •• Evaluation and continuous improvement. •• Assessing verifiability of activities. •• Member CPD tracking and reporting systems (member-based vs. PAO-based, paper-based vs. online, etc.). •• Monitoring different approaches to CPD measurement (input-based and output-based). •• Verifying and auditing member reports. •• Enforcement, remediation, and disciplinary sanctions. Key questions addressed in Part 3 •• How to administer and operationalize the CPD program? •• How to ensure sufficient, appropriate course offerings are available for members? ? •• How to determine the range of formats to offer and accept? •• How to monitor and enforce program compliance among professional members? 37 3.1 The operational cycle for CPD Administering and maintaining the CPD program •• Practice or firm inspection or peer review involves many roles and/or departments: •• Facilitating partnerships or approvals of third •• CPD administration (registration, venue party providers coordination, attendance tracking) •• Communications (with members and the public) Remember that a mature organization has a dedicated CPD department, but other departments •• IT systems and support or staff will be involved as well. •• Member services The operational cycle for a CPD program is depicted •• Investigations, ethics, and discipline in Figure 9. The remainder of this Part will walk through the activities in the cycle. Figure 9. Operational cycle for a CPD program 3.2.1 Communicate with 3.2.2 Provide tools/guidance 3.3 Provide and/or facilitate stakeholders for compliance access to CPD 3.5.2 Report to Board/other 3.4.1 Administer completion 3.4.2 Monitor compliance stakeholders and reporting 3.5.1 Investigate and remediate/sanction 3.2 Communication, guidance, and tools 3.2.1 Communication with members and other stakeholders Effective implementation of a CPD program requires •• rovide rationale and basis for decisions and P clear and consistent communication to members and changes. other stakeholders. Communication to members must: •• E xplain timelines and transitional allowances (if any). •• Clearly explain the requirements and expectations •• P rovide information on opportunities, options, of the CPD program. and support. 38 •• Explain monitoring and sanctioning processes. Key messages to stakeholders •• ncourage questions and feedback, and be E responsive. Members •• How CPD benefits members through career With communications, there is a need to balance the enhancement and personal development; desire to get information out quickly to let members and other stakeholders know well in advance about •• The PAO’s commitment to CPD; changes that are being introduced, while also being •• Requirements for members; careful not to release too many details and lock in to a course of action before all of the related logistics •• Opportunities and options for compliance; have been set. •• Consequences of non-compliance; Effective communication makes use of frequent •• Encouragement to plan and keep record updated; messaging in a variety of formats. Depending on the •• Where to get more information and/or provide specific information being conveyed, it may be most comments. appropriate to communicate through the website, blogs, email, physical mailing, announcements at events, and so on. Firms/employers •• How member competence benefits firms; Recall that IES 7 (2020) requires IFAC member bodies to “promote the importance of, and a commitment •• How firms can help members comply; to, CPD and maintenance of professional •• Benefits for firms in providing in-house CPD (cost competence.”22 These messages can be included in savings, greater relevance); your communications by, for example: •• dditional benefits for firms who join the employer A •• stating and illustrating the organization’s accreditation program (if offered by the PAO); commitment to competence and protecting the public interest; •• Where to get more information and/or provide comments; •• emphasizing the value – beyond compliance – of CPD for members and those they serve; •• Opportunities for collaboration to support future skills needs. •• promoting the variety of CPD opportunities available to members to meet their obligations; and Other CPD partners •• emphasizing the importance of CPD to employers •• Opportunities for partnering; and providing guidance on tying CPD to employee performance. •• Benefits to partners; •• Criteria for partnering or being accredited; Messages should be consistent with strategic •• Where to get more information and/or provide decisions and with other communications. For comments. example, it would be counterproductive to promote to firms the benefits of providing in-house CPD if the PAO only accepts its own CPD offerings. To maximize Government/regulators the effectiveness of communications, PAOs should •• T he PAO’s compliance with any statutory also tailor communications for different stakeholders, requirements around CPD; such as members, employers, regulators, and so on. Communications should focus on the benefits, •• Commitment to acting in the public interest; responsibilities, and opportunities from the •• Importance of member competence; perspective of the specific audience. Samples of key messages to stakeholder groups are provided •• How CPD system maintains member competence; in the section below. •• Accountability mechanisms; •• Results of program as available (member compliance rates, etc.). 22 IES 7 (2020), supra note 11 at para 10. 39 The public •• Benefits of hiring a professional accountant over a non-designated individual; •• The PAO’s commitment to the public interest; •• Importance of member competence in protecting •• Where to get more information and/or provide comments. the public; •• How having a CPD system maintains member competence; 3.2.2 Guidance and tools to support compliance Recall from Part 1.2.7 that IES 7 (2020) encourages the use of a CPD Framework as a key resource for Figure 10. Sample CPD Framework from members as they plan and complete their CPD. CPD Self- Frameworks currently in use by PAOs include: assessment •• Institute of Chartered Accountants in England and Wales (ICAEW): The Reflect, Act, Impact, Declare approach provides a framework for IES 7 (2020) members to systematically plan, complete, and Revise plan Plan CPD reflect on their CPD activities.23 CPD •• Institute of Chartered Accountants of Scotland Framework (ICAS): The Professional Development Process guides members though four steps to: 1. Define current and future roles; 2. Decide on training and development needs; 3. Identify CPD activities; Complete and 4. Reflect and record activities on the CPD Reflective & record Record.24 activity CPD •• South African Institute of Chartered Accountants (SAICA): SAICA allows members to choose an input-based or output-based approach. Members who choose the output-based model follow an they may have to revisit areas of competence that annual cycle of Reflect/plan; Learning action; they may not have utilized since certification, and Evaluation; Declare.25 there may also be new competence requirements that they need to address through their learning plan Think back to the Sample CPD Framework provided in order to meet the expectations of a new role. in the proposed revisions to IES 7 (2020). The Framework itself is one of the tools that is useful Without adequate tools and guidance from the PAO, for members in planning and evaluating their CPD. members may have difficulty planning for and meeting Walking through the CPD process from a member’s their CPD requirements in a way that meaningfully perspective (using the Framework) is a good method enhances their professional development. For for thinking about the other tools and guidance that example, guidance to members should contemplate members need. There follows a list of sample tools that members may change career tracks. In doing so, and guidance that PAOs should consider providing, referenced to the CPD Framework. 23 Institute of Chartered Accountants in England and Wales, “Our Guide To CPD”, online: ICAEW . 24 Institute of Chartered Accountants of Scotland, “ICAS CPD Requirements”, online: ICAS [“ICAS CPD Requirements”]. 25 South African Institute of Chartered Accountants, Revised CPD Policy (2013), online: SAICA . 40 Self-assessment tools/guidance such as: •• “Sets” of courses that complement each other and the order they should be completed in •• Tools for assessment of market-driven future skills needs and current skills gaps. Recording tools/guidance such as: •• ummaries of expected competencies or learning S outcomes, with proficiency levels. •• Templates to record CPD activities, including all pertinent information that would be needed if •• Examples of how competence could be audited for compliance demonstrated in different contexts. •• Surveys/questionnaires for self-reflection. •• Online tracking system with easy demonstration •• Clear information on the amount and type of verifiable evidence required to support CPD CPD planning tools/guidance such as: •• FAQs on requirements and acceptable options Reflecting and revising tools/guidance such as: for compliance •• Schedules of course offerings •• Follow-up columns on the self-assessment form or CPD record to reflect on effectiveness •• Course descriptions including “Who should •• Space on self-assessment form or CPD record to attend” and pre-requisite knowledge adjust CPD plan Example of tools for self-assessment and CPD planning: CPA Australia CPA Australia’s My Capability Plan provides a tool for CPA members to determine their levels of capability within the four core knowledge areas: technical, business, leading self, and leading others. Based on the results of the self-assessment, the tool provides recommendations for CPD courses and other resources to move from the current level of capability to a higher level.26 Example of tools for recording CPD: CPA Ontario CPA Ontario’s CPD Requirements brochure provides clear information on the amount and type of verifiable evidence required to support CPD27: Verifiable CPD Activity Qualifying Number of Hours Acceptable Documentation CONTINUING EDUCATION Hours spent attending the Any one of the following: Participation in a course, course, webinar, conference, •• Certificate of completion or webinar, conference, or or seminar; Hours spent official transcript. seminar; Enrolment in a formal preparing or studying for the •• Confirmation of participation education program leading to course, conference, seminar, or by provider or employer (e.g. a degree, diploma, certificate, exam (to a maximum of 5 hours registration confirmation). re-certification or designation. preparation time for each hour •• Attendance record (e.g. sign- of participation). in sheet). •• Copy of course payment/ invoice. INSTRUCTION/SPEAKING Hours spent preparing for the •• Copy of course or presenta- Teaching a course or session course/session (to a maximum tion material from the session in an area relevant to your of 5 hours for every hour of including date and speaker professional role. teaching time) details Participation as a speaker in a con-ference, briefing session or •• A log of preparation hours discus-sion group. (by date) CPA Australia, “My Capability Plan”, online: CPA Australia . 26 Chartered Professional Accountants of Ontario, A Simple Guide to CPD Requirements (2018), online: CPA Ontario [“CPA Ontario CPD Guide”]. 41 Example of recording and reflecting tools: ICAS Blank CPD record templates and sample completed CPD records are provided for members to reference and use.28 Specific guidance is given to audit engagement partners to assist them in meeting the requirements of IES 8 including sample completed CPD records for experienced engagement partners and those working towards becoming an engagement partner.29 3.3 Providing and/or facilitating access to CPD 3.3.1 Determining the scope and breadth of course offerings What topics are relevant for CPD? are available on the IAESB website, as part of the Handbook of International Education In order for learning activities to contribute to Pronouncements.30 These Learning Outcomes professional development, the topic of the activity provide the basic scope for technical must be relevant to the profession. This includes competency areas as well as professional skills, the technical areas related to the professional values, ethics, and attitudes. Proficiency levels accountant’s current employment, as well as areas are set for IPD rather than CPD, so if proficiency that may be chosen to pursue career advancement levels are referred to, they should be adjusted or a change in role. It also includes the fundamental for members, as appropriate. professional skills, values, ethics, and attitudes that are expected of all professional accountants. Based on the domains in the IESs, an appropriate When a PAO sets its policies for CPD, one of the scope of topics that would be deemed relevant for questions that will need to be answered is what CPD should include: scope of topic areas will be considered relevant and appropriate for CPD? There are two main ways to •• Technical competence areas (see IES 2) answer this question. Recall from Part 1.4 that: a. Financial accounting and reporting 1. A PAO’s Competency Framework sets the boundaries for what is acceptable and relevant b. Management accounting for professional development in terms of both c. Finance and financial management technical competencies and the enabling domains of professional skills, values, ethics, d. Taxation and attitudes. e. Audit and assurance 2. If a PAO does not have a Competency Framework the Learning Outcomes in IESs 2, f. Governance, risk management, and internal 3, and 4 (and IES 8 for Engagement Partners) control can be used to help define scope. The IESs 28 ICAS CPD Requirements, supra note 22. 29 Institute of Chartered Accountants of Scotland, “International Education Standard 8”, online: ICAS . 30 IAESB Handbook of International Education Pronouncements (2019), supra note 5 42 g. Business laws and regulations Professional skills, and Professional Values, Ethics and Attitudes) that relate specifically to audit engagement h. Information and communications partners. These go beyond, and add context to, the technologies learning outcomes in IES 2, 3 and 4. Examples of i. Business and organizational environment learning outcomes for engagement partners include: j. Economics •• Technical competencies (see IES 8) k. Business strategy and management a. Audit: Lead risk identification and assessment; evaluate response to risk •• Professional skills (see IES 3) of material misstatement; evaluate audit performance in accordance with standards, a. Intellectual, such as research; analysis; laws, and regulations; develop appropriate integration; critical thinking; dealing with audit opinion. unstructured problems. b. Financial accounting and reporting: b. Interpersonal and communication, such as Evaluate financial statements; recognition, collaboration; concise and clear written and measurement, presentation, and disclosure; oral communication; cultural awareness; judgments and estimates, fair presentation. active listening; effective interviewing and negotiating. c. Governance and risk management: Evaluate governance structures and risk c. Personal, such as commitment to lifelong assessment processes as part of overall learning; open-mindedness; time audit strategy. management; high personal standards of performance; anticipating challenges. d. Business environment: Analyze relevant industry, regulatory, and other external d. Organizational, such as quality review of factors that are used to inform audit risk self and others; adherence to established assessments. practices; leadership, motivation, and delegation. e. Taxation: Evaluate procedures to address risk of material misstatement with respect to tax amounts. •• Professional values, ethics, attitudes (see IES 4) f. Information technology: Evaluate IT a. Professional skepticism and professional environment and controls. judgment, such as applying a questioning g. Business laws and regulations: Evaluate mind; reducing bias. non-compliance with laws and regulations b. Ethical principles, such as identifying ethical to determine impact on audit and audit threats; evaluating ethical consequences opinion. of alternatives; applying the fundamental h. Finance and financial management: principles (per IESBA Code31: integrity, Evaluate sources of financing, financial objectivity, professional competence and instruments; evaluate cash flows, due care, confidentiality, and professional budgets, forecasts, and working capital behavior). requirements. c. Commitment to the public interest, such as explaining the role of professional ethics with respect to social responsibility, •• Professional skills (see IES 8) business, and governance; analyzing the i. Interpersonal & communication: Effectively interrelationship between laws, ethics, and communicate and consult with team, the public interest; analyzing consequences management, etc. of unethical behaviour to the individual, the profession, and the public. j. Personal: Act as role model, mentor, and coach. For Audit Engagement Partners, IES 8 provides k. Organizational: Evaluate team objectivity additional learning outcomes that a PAO can and competence; engagement project incorporate into its CPD program. Learning outcomes management and team management. are specified in each of the areas (Technical, 31 IESBA Code, supra note 1 at para 110.1 A1. 43 •• Professional values, ethics, attitudes (see IES 8) •• Professional skills, values, ethics, and attitudes – these are deemed to be the most essential l. Commitment to the public interest: competencies for professional accountants in Promote audit quality in the public interest. terms of their ability to protect the public (see Part 5 for ideas on how to incorporate these m. Professional skepticism/judgment: Apply competencies in CPD courses). professional skepticism and professional judgment in planning and performing audit •• Topics that reflect areas of increasing importance and developing opinion. for the profession and its stakeholders (such as emerging issues in technology and regulation, n. Ethical principles: Apply ethical principles areas where risk or opportunities are increasing, in the audit context; promote compliance etc.) with the principles amongst the audit team. •• Topics in high demand by members – members should be encouraged to self-assess their areas of weakness; surveys can help determine areas of high demand. What course offerings should a PAO focus on? When considering the breadth of offerings that PAOs need to balance member requests and PAO a PAO should develop and offer to members (or oversight facilitate access to through partnerships) there are a Whereas accommodating member demand for number of considerations. Most PAOs have limited specific CPD topics is important, recognize that resources for course development, so it is important members will focus on what they think is of greatest to prioritize appropriately and ensure that members value. They will often concentrate on the knowledge have access to the most beneficial courses. they need to make money. It is up to the PAO to Priorities should include: educate members on the benefits of balancing technical and enabling competencies. Educating •• Essential technical domains - especially with members on the appropriate balance of CPD is part respect to new and emerging standards and of the PAO’s obligation under IES 7 to promote a business trends. commitment to lifelong learning, focusing on the •• Areas where competence issues have more public interest. commonly been noted in the past - through studies, gap analyses, practice reviews and inspections, and disciplinary investigations. 3.3.2 Options for CPD formats Variety and verifiability in learning recognizes that different people learn and develop activities in different ways, and that a variety of learning styles should be supported. Recall also that the CAPA In addition to determining the scope of topic areas Maturity Model found that mature organizations tend to deem relevant for CPD, PAOs must also decide to include online options for PD. These allow PD to be what formats of learning activities to accept. Recall completed remotely, and also often at whatever time from Part 1.2.5 that IES 7 (2020) provides guidance on members choose, thereby increasing flexibility. In the many different types of learning activities, including new ‘agile’ workforce, just-in-time mobile learning in-person courses and seminars, online webinars is becoming increasingly needed and expected by and mobile learning products, re-examination, members. Online PD includes both synchronous developing educational materials, coaching and options (such as webinars) and asynchronous models mentoring, on the job experience and self-directed (such as audio-only mobile learning or video-based research, among others. Diversity in training courses). 44 IES 7 (2020) provides guidance regarding the activities as contributing to CPD, the PAO should importance of verifying learning outcomes for the provide guidance to employers to help them design activities undertaken. The challenge for PAOs is to performance review systems that are verifiable from allow members to learn and develop in as many ways the PAO’s perspective. This does not need to be as possible, while also ensuring that professional complex – most performance reviews are fairly well development is objectively verified. structured and documented already, but for CPD purposes they would also need to be tied to learning For courses, seminars, and other in-person events, outcomes (e.g., the PAO’s Competency Framework) attendance sheets and course materials provide and signed off by a qualified supervisor. evidence for attendees. For articles, publications, and presentations prepared by members, the As an illustration, ACCA allows members to complete deliverables produced provide verification of the CPD through an “approved employer route”, activity and learning outcomes, although some PAOs where an employer’s learning and development may put a limit on the maximum time that can be program is reviewed by ACCA to see if it provides claimed for research and preparation. In addition, sufficient verifiable learning and development to most PAOs allow CPD to be claimed only for new meet annual CPD requirements32. If the employer’s research and presentations where learning and program is approved, the member keeps evidence development is occurring, rather than for repeated of participation in the program, and makes a CPD sessions or publications. Peer reviews of research declaration to ACCA each year certifying that their and other academic publications can also provide CPD requirements have been met through this route. verification of the learning outcomes achieved. If a member of a PAO is also a member of another PAO The results of formal reviews completed as part of that is an IFAC member body, there is an opportunity the PAO’s quality assurance and oversight roles can to recognize compliance with CPD requirements also be used to show the effectiveness of learning by way of the member meeting the other PAO’s activities. For example, the results of practice requirements. For example, ACCA also offers an reviews can support the achievement of learning “IFAC body route”33. If an ACCA member is also a outcomes. For engagement partners, internal and full member of another professional accountancy external quality reviews can help demonstrate that body, ACCA accepts the member’s compliance IES 8 learning outcomes are being achieved and with the other PAO’s program, as long as the other maintained. professional body is a member of IFAC and the other body’s CPD policy complies with IES 7 (2020). Assessments that occur as part of certification or re- certification are a very effective method of verifying learning outcomes. These are typical for professional accountants who pursue further education or How the measurement approach impacts specialist qualifications, but much less common in acceptable activities terms of the PAO periodically testing or re-certifying members. In some jurisdictions, however, periodic The formats of CPD activities that a PAO accepts re-evaluation of member competence is a regulatory will depend to some extent on the measurement requirement that can pose challenging for a PAO approach being used. If an output-based approach to implement. One area where assessments have (or combination of approaches) is being followed, become common, however, is the use of multiple- it may be possible to allow greater flexibility in the choice tests at the end of online and mobile learning type of learning activities that are recognized, as activities, where passing a quiz is required in order it is up to the member to demonstrate how the to download a completion certificate to verify the activity contributed to their PD. Thus, output-based CPD activity. systems typically allow any combination of structured seminars, on-the-job training, research and writing, In a workplace setting, results of engagement coaching and mentoring, and so on. reviews and annual (or more frequent) performance reviews from supervisors provide evidence of If an input-based approach is used, there is a need professional development from on-the-job training to specifically define what activities are verifiable. and experience. Similarly, surveys or other feedback Verifiable activities require objective evidence of from customers and clients can contribute to completion, therefore most PAOs following this verifiability. If a PAO intends to accept workplace approach will limit the activities deemed verifiable 32 Association of Chartered Certified Accountants (ACCA), “CPD i-Guide”, online: ACCA . 33 ACCA, “CPD Routes”, online: ACCA . 45 and require specific evidence to support the activities •• O ccupational or industry change - major change claimed. For example, CPA British Columbia (which in type of employment or major changes in follows an input-based approach) provides the job responsibilities that require significant following guidance to members with respect to development of new skills; verifiable PD34: •• R esponsibility for major corporate changes - mergers, takeovers, debt/equity issues, major Verifiable Qualifying Hours refers to learning financial re-organizations, research and installation activities for which there is satisfactory evidence of computer software systems/applications. to objectively verify participation in the learning activity. In contrast, ICAS, which follows an output-based Examples of verifiable CPD: approach, does not restrict what activities can be used to support professional development. It tells •• Attendance, as a participant or lecturer, at members that36: courses, conferences, seminars, workshops, presentations, technical committees, or The ICAS CPD model places the onus on each discussion groups; member to decide what their professional •• Research that results in publications or development needs are and how to address them presentations; through a variety of CPD activities. Members are asked to focus on the outcome of CPD activities, •• Structured employer-based in-house training as opposed to the time spent on them. sessions; •• Programs of study that involve the successful Under the CPD scheme there is no requirement to completion of an examination or certification achieve a certain number of hours or points - the in the current CPD reporting year; important feature is that consideration is given to the requirements of the position and that learning •• Computer-based learning activities that involve addresses this. the successful completion of an examination or certification; This development framework allows the individual •• Professional re-examination or formal testing. member to be the best judge of how much CPD they need and which activities are most beneficial Verifiable CPD documentation should: in meeting their learning and development needs. CPD should be proportionate and relevant to a •• Describe the learning activity; member's role. •• Identify the provider of the activity, where applicable; ICAS recognises that there may be periods where CPD activity fluctuates and some years will require •• Connect the member to the activity; more development than others. CPD activity •• Identify when the activity took place; and can, for example, include work-based learning; undertaking new projects at work, on-line reading, •• Provide a basis for concluding that the number researching a particular issue relating to a client of reported hours is reasonable. or a role, and focused discussions with colleagues or other professional advisers. CPA Ireland (also using an input-based approach) recognizes the typical range of verifiable activities, These examples illustrate the differences between but also explicitly allows members to claim a limited input- and output-based systems. Note that ICAS number of “structured” (verifiable) CPD hours based recognizes learning activities such as reading and on activities for which learning outcomes are more discussions on par with other more formal activities difficult to objectively measure. CPA Ireland allows such as seminar participation. Input-based systems, up to 15 hours in a three-year period for each of the on the other hand, would consider reading and following categories35: discussions as non-verifiable. •• Service on technical committees/panels – with evidence of a definite output and that the committee member contributed original research or other work; 34 Chartered Professional Accountants of British Columbia (CPA BC), “Verifiable vs. Unverifiable CPD Learning Activities”, online: CPA BC . 35 The Institute of Certified Public Accountants in Ireland (CPA Ireland), “CPD Information”, online: CPA Ireland . 36 ICAS CPD Requirements, supra note 22. 46 The bottom line on formats and variety of outcomes. PAOs should recognize the opportunity to learning activities accepted use a variety of methods to verify learning, including those that are more objective (such as hours spent PAOs should allow as broad a range of learning in sessions, test scores, or performance reviews) and activities as possible, recognizing and supporting those that are more subjective (such as planning CPD member needs and preferences for learning styles. needs and self-assessment of learning outcomes For newer programs, however, it may be prudent to achieved). Ultimately, the range of formats offered limit the formats initially to ensure adequate control will need to balance PAO control with member over the verifiability of completion and learning flexibility, and will depend on the strategic decisions made with respect to CPD. 3.3.3 Facilitating access to CPD: development and delivery options PAO Role: Direct provider or Access If the PAO develops and delivers its own content, the facilitator? PAO has greater control over quality and suitability, and has a means of direct messaging to members. To Recall that under IES 7 (2020), PAOs are obligated to ensure they are providing relevant and high quality facilitate access to CPD opportunities and resources. CPD learning activities that support the development Part 2.1.3 discussed the strategic decision regarding and maintenance of professional competence, PAOs where to position the organization on the spectrum should develop an accreditation system of CPD of “direct provider of CPD” to “access facilitator to providers. Including instructional designers and CPD”? This spectrum can be represented as follows: education specialists can help ensure that learning styles are addressed appropriately. In addition, practitioners should be included in the development and review of learning materials to ensure relevance. Figure 11. Spectrum of PAO role In-house “Partnering” development with external The downside is that developing a full catalogue and delivery providers of CPD courses is expensive and requires a great deal of expertise, both with respect to developing content and administering sessions. A learning Direct Access management system (LMS) may be required as part provider facilitator of the infrastructure to support the learning program. Facilitation Pricing and functionality of these systems can vary of Subject widely. Assuming responsibility for developing and Matter delivering a CPD program independently brings a Expert-owned significant amount of responsibility and risk to the content PAO. If a PAO chooses to be a direct provider: If a PAO chooses to be an access facilitator: •• Staff or contractors develop course content. •• The PAO “partners” with external providers, such •• The PAO owns the content and arranges classes/ as universities, commercial training providers, sessions. or firms. •• Delivery could be through in-class sessions, online •• The “partnership” may be formally-agreed on, or platforms, mobile offerings, etc. the PAO may simply endorse certain organizations’ course offerings. •• Staff or contractors hired by the PAO teach or facilitate the classes/sessions. •• The material is generally prepared, delivered, and owned by the partner organization. •• The PAO receives any fees charged and is responsible for all costs. •• Members claim learning activities as approved CPD. 47 •• Profits may belong to the partner organization •• The PAO manages the logistics (e.g., session entirely, or may be shared (e.g., PAO may registration, venue, meals, distribution of course receive a commission on the seminar fees of materials, online platform hosting, etc.). each participant that they send to the external provider). In addition, some PAOs combine elements of all •• There is greater opportunity for collaboration, three roles. For example, in Canada the PAO has depending on the agreement. decided to maintain control over courses that fall within the core, technical competency areas of accounting, auditing, and taxation. For these topics, The need for a broad range of high-quality learning CPA Canada produces its own courses, often using activities provides a strong business case for contracted SMEs. CPA Canada retains ownership of partnering with other organizations that provide the content and has strict quality control processes training in relevant topic areas. Formats need to to ensure currency and consistency. allow for learning outcomes to be verified in a manner that aligns with the PAO’s measurement For other competency areas, however, the national approach and evidence requirements. To this end, and regional CPA bodies use a combination of third-party courses that can be mapped to the PAO’s approaches to ensure members have access to Competency Framework or Learning Outcomes a comprehensive set of CPD resources. Some should be considered for acceptance by the PAO. courses are developed by contracted SMEs and owned by CPA Canada or a provincial body, while Firms can be an important source of partnering with others are owned by the SME who is then hired to PAOs. Larger firms often provide in-house training deliver sessions at conferences or other professional for their professional accountants, and the PAO development events. Additionally, other PD products can recognize these as contributing to professional that are owned and delivered by independent development. Firms are in a particularly suitable training providers may be endorsed by the PAO. position to help their engagement partners address IES 8 learning outcomes. Where possible, PAOs As an illustration, CPA British Columbia (CPABC, a should consider opportunities to collaborate with provincial PAO in Canada with more than 35,000 firms and provide input on the internal training that members) offers in excess of 1,000 sessions annually can be most relevant from a PD perspective. For in its PD catalogue, offering a mix of formats: example, firms should be encouraged to consider the importance of helping professional staff develop •• Half-day and full-day in-person seminars; in both the technical and professional sides of •• Industry-specific mini-conferences; competence. •• Multi-day conferences; Using external partnerships allows the opportunity to •• Certificate programs (executive leadership, leverage high-quality and well-resourced programs strategic management); without additional cost or risk. In this way, the PAO can gain access to a much broader set of expertise •• Live webinars; and a greater range of course offerings. But when •• On-demand webinar replays; partnering with another organization for CPD content, the PAO has less direct control over quality •• Interactive on-line courses. and suitability of that content, so criteria need to be established to review and approve third-party Some content is owned by CPABC, whereas other courses before endorsing them. courses are owned by SMEs. CPABC also partners with independent training providers, such as K2E Options within and along the spectrum Canada Inc. (for technology-related online courses) and ProDio Audio Learning Inc. (for mobile learning A PAO is not limited to choosing a strategy from offerings). These offerings are endorsed by CPABC only one end of the spectrum. In the middle, there and the PAO advertises and sells the products is the option to facilitate access to learning activities under revenue-sharing agreements. In all, CPABC that are developed and owned by an independent has more than 100 approved CPD facilitators. This Subject-Matter Expert (SME). In this outsourcing comprehensive approach underscores CPABC’s model: commitment to supporting and enabling members •• The SME develops, owns, and delivers the content. to meet their CPD obligations, and to maintain and expand their competence in the public interest. 48 Logistics and tasks when facilitating CPD •• rained as necessary to act as appropriate T spokespersons/ambassadors for the profession and the organization; Development and delivery standards Regardless of whether CPD is developed in-house •• Objectively evaluated based on participant feedback and (where possible) first-hand or facilitated with partners, standards are needed to observation. ensure that: •• Materials are designed to develop appropriate Accrediting trainers based on verifying their learning outcomes. expertise was tied to maturity in the CAPA model, •• Materials reflect an adequate proficiency level for and is important to ensure quality. When hiring or the audience. contracting SMEs to develop and/or present CPD content, it is important that the SMEs chosen be •• Sessions will be engaging (see Part 4 for tips on properly vetted, trained, and supported. This extends creating engaging CPD sessions). to situations where the PAO is collaborating with a •• Sessions will result in learning, not just third-party provider and is able to review the experts entertainment or marketing the presenter’s being used in the program. business. When contracting SMEs, the PAO should: PAOs may choose to formally map CPD sessions to •• Verify the SME’s expertise by checking references. learning outcomes or their Competency Framework, or it may be a less formal process. For an example •• Review prior feedback received on the SME’s sessions, as available. of a comprehensive set of development standards for CPD accreditation, see The Statement on •• Ensure the contract covers essentials clauses, Standards for Continuing Professional Education reflecting the level of risk being undertaken by (CPE) Programs published jointly by the American each party and addressing appropriate course Institute of Certified Public Accountants (AICPA) quality: and the National Association of State Boards of {{ The specific deliverables, including formats Accountancy (NASBA)37. These standards include expected; the following requirements: Development deadlines agreed to (interim •• {{ Programs must be based on learning outcomes; and final); •• Experience/pre-requisites must be specified; {{ Any penalties for missed deadlines; •• Materials must be current and technically accurate; {{ Specific performance - no subcontracting •• Developers and reviewers must be qualified; without permission; •• In-class sessions must have sufficient elements of {{ Material must be original (or permissions engagement; secured); •• Online courses must provide evidence of {{ Fees, expense reimbursement policies; completion. {{ Copyright – who owns what? {{ Exclusivity arrangements; Contracting developers and presenters {{ Confidentiality requirements; Part of quality control over CPD requires that {{ What happens if a scheduled session is facilitators be: cancelled due to a lack of registrations (notice •• Experienced in instructional design (e.g., an to be given, fees – if any – to be paid); education specialist); {{ Requirement for the SME to stay current and •• Chosen based on their ability to facilitate learning in good standing (if developer/presenter is a outcomes (i.e., effective teachers); professional accountant). •• SMEs in the area being taught; 37 American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA), The Statement on Standards for Continuing Professional Education (CPE) Programs (2016), online: NASBA . 49 Planning and hosting upcoming session offerings Continuous improvement When arranging the logistics of running CPD Participant feedback should be used to evaluate sessions (by hosting seminars and conferences, or topics, content, facilitator effectiveness, and event coordinating access to online courses, etc.) there organization and management. Participant feedback are a few considerations that should be kept in mind: should be collected, compiled, and shared with •• Sessions should be scheduled based on the presenters. “professional calendar” (e.g., sessions that will be popular with public practitioners should be Based on the participant feedback received, the PAO offered outside of their busiest season). should: •• Concentrate on offering sessions during periods •• Review and evaluate individual seminars. when members are most interested and focused (members are typically deadline-driven and think •• Review and evaluate presenters and facilitators. about their CPD most when the CPD year-end or •• Review and evaluate venues for suitability. reporting deadline is getting close). •• Review topics for continued relevance and •• Registration should be facilitated in advance to currency. determine demand. This can most efficiently be •• Refresh technical areas based on standards done using an online system, or alternatively changes. through phone support. •• Refresh business topics based on trends and •• Clear and fair policies should be set for interests. cancellations/refunds. •• Refresh sessions on professional skills, values, •• For in-person sessions, negotiate with venues for ethics, and attitudes to provide variety. favourable rates, and coordinate services to meet presenter and member needs and expectations •• Ensure sufficient choice for mandatory elements. (e.g., audio-visual equipment, meals/beverage service respecting dietary restrictions, parking, Participants should be encouraged to provide room rates for out-of-town participants, etc.). honest feedback, and negative comments should •• Consider holding in-person sessions in a variety be carefully considered. However, there are a few of geographic locations, to increase convenience caveats when reviewing feedback received from for members (e.g., choose a few major centres participants: that can provide sufficient demand to make each •• e careful not to give too much weight to any B viable). one review, and consider sample sizes when •• For online sessions, coordination with IT support evaluating – avoid the knee-jerk reaction to a is essential to ensure that members are able to single or a small minority of vocal responses. participate easily and get technical help when •• F irst hand observation is important to ensure that needed. members are not reacting negatively to a strict, but fair facilitator or reacting positively to one who All of these considerations require sufficient staffing is entertaining but doesn’t teach them anything. and resources to ensure they run smoothly for •• I f the leadership believes a topic is important and members. Administrative staff who manage the implements a mandatory topic requirement, some processes before and during sessions need to be members may find the requirement burdensome properly trained and given sufficient authority to take and react negatively (remember the “take your action and correct issues that arise. medicine” problem presented in Part 2.3). 50 3.4 Monitoring and supporting member reporting and compliance 3.4.1 Administering CPD completion and reporting As members complete their CPD learning activities, and privacy, but it also allows for automation of many they will need support from the PAO. To avoid monitoring and review processes. Online systems making this strictly a compliance task, it is important also tend to result in more standardized reporting, for the PAO to support the professional accountant as categories of activities can be defined, and to take responsibility for completing and recording information can be collected using specified fields CPD learning activities. Administratively, the PAO for completeness of reporting. If an online system is will provide guidance and tools to allow members introduced, there should be clear instructions for use to effectively and efficiently keep track of their and sample entries available for members to refer to learning activities in a format that will satisfy the as guidance. PAO’s evidence requirements. As discussed in Part 3.2.2, this may include templates to record activities In addition to general administrative assistance, (paper-based or online), guidance on the evidence PAO staff will be called on to respond to compliance to be retained, and some information on the PAO’s queries and assist with questions about CPD monitoring and CPD auditing process. recording and reporting. Training on existing policies will be needed to ensure that members receive clear The decision to use paper-based or online tracking and consistent answers to their queries. Ongoing and reporting will normally depend on the size of the communication with members as they complete CPD membership and the resources of the organization. should remind them of the benefits of self-assessing Online reporting is initially more costly for the PAO their learning needs on an ongoing basis and using and requires attention to system reliability, security, a gap analysis to plan future CPD activities. 3.4.2 Monitoring compliance The specific activities by a PAO to monitor member perhaps with a notice of administrative fees attached. compliance depend on the requirements and If a member still fails to file their annual CPD report, policies set. Members who are required to report they would now be considered a non-reporter, and CPD can be categorized as shown in Figure 12. the appropriate investigation/disciplinary processes should begin, in accordance with the policies set When the CPD reporting deadline arrives, some (see Part 3.5). percentage of the membership will miss the deadline, despite many organizations sending a “reminder to Most PAOs do not ask members to submit evidence report” message prior to the deadline to increase with their CPD report, but instead require them to compliance. Organizations will often then address late maintain documentary evidence to support their reporters through an administrative process and send CPD report in case of audit. additional reminders and follow-up correspondence, 51 •• What approach to CPD is being followed: Members {{ Input-based: Check compliance with hours required to requirements (or equivalent) during the year report and over the cyclical period, as applicable. Figure 12. Categories of reporting members CPD {{ Output-based: Assess the CPD learning plan, the sufficiency of activities undertaken, and the reasonableness of conclusions with respect to effectiveness in achieving learning outcomes. On-time Late reporters reporters The audit process evaluates the records and supporting evidence against CPD requirements. Supporting evidence could include: •• Course outlines and materials. •• Confirmation of participation by instructor, Reporters Non- employer, or administrator. Non- indicating compliant reporters •• Official certificate of completion. compliance reporters •• Results of exams or other assessments. •• Peer review or publication of written works. Investigation / Disciplinary •• Course materials developed and delivered. Audit process processes •• Achievement of a specialist designation. •• Review of work logs verified against competencies. •• Independent practice inspections/review by Verifying compliance can be done manually or, regulators. if using electronic reporting, by generating an exception report to identify non-compliant reporters. The audit process will typically identify additional From the set of reports that indicate compliance with non-compliant reporters who would also be subject the PAO’s requirements, a sample of members are to whatever investigation/disciplinary processes and selected for audit, and are asked to supply evidence sanctions have been deemed appropriate by the of their reported CPD activities. PAO (see Part 3.5). There are a number of factors the PAO should consider with respect to monitoring compliance: •• What audit sample size is needed to be reliable? •• Is risk-based sampling done? If yes: {{ Which roles involve higher risk? {{ Which roles have the greatest responsibility to the public? {{ Which patterns of behaviour suggest a higher priority for sampling (e.g., previous non- compliance, other ethics breaches in the past)? •• Is monitoring annual or cyclical? If cyclical: {{ What cycle is reasonable? {{ What cycle would be expected by regulators, public, etc.? 52 3.5 Investigating, remediating, and sanctioning non-compliance, and reporting results 3.5.1 Investigating, remediating, and sanctioning As mentioned previously, many PAOs address Appropriate sanctions some CPD matters administratively, such as levying standard fees for late filing of CPD reports or for If the PAO’s ethics investigation and discipline first-time shortfalls in learning activities that are processes find that a member is non-compliant with subsequently remedied. Responding to relatively the CPD requirements, appropriate discipline may minor infractions through administrative processes include the following mix of remediation and punitive may be appropriate, but in general, failure to comply sanctions: with CPD requirements is a serious matter that should be seen as the purview of a PAO’s ethics and •• Requirement to promptly make up the shortfall discipline processes. The first goal is remediation •• Requirement to take prescribed courses –bringing the non-compliant member back into •• Reprimand placed in a member’s file compliance as quickly as possible, in the interest of protecting the public. In some situations, a •• Public naming of the non-compliant member remediation or education approach is the focus of •• Fine the PAO’s actions, whereas in other situations, a more punitive approach is warranted. •• Limit on practicing rights •• Suspension As an example of a focus on remediation, CPA Ontario provides the following guidance to non- •• Expulsion/cancellation of membership compliant members38: Sanctions should be balanced: What if I’m unable to meet the requirements? •• Too light: encourages non-compliance 1. If you did not complete the minimum •• Too heavy: excessively punitive annual CPD requirements…you will need to complete the online Plan of Action…which sets out the steps you will take to complete Factors to consider when determining appropriate the CPD requirements. This Plan…must sanctions for non-compliance with CPD requirements provide sufficient detail, including names and include: providers of any planned learning activities, as •• The PAO’s legal authority to sanction its well as hours and end dates. professional members. 2. Within 120 days of filing the above Plan, you •• Whether the non-compliance is related to a failure must complete your required CPD and … to maintain competence or failure to report CPD attest to the CPD completion. If the Plan is activities. incomplete or the learning activities set out in the Plan are not met within 120 days, your •• Mitigating circumstances (illness, etc.). membership may be suspended. You may only •• Pattern of behaviour (repeated breaches). submit one Plan of Action during a triennial •• Willful disregard of the CPD requirements. period. 38 CPA Ontario CPD Guide, supra note 27. 53 A failure to maintain competence is generally Liaising with quality assurance processes considered as more serious than failing to report activities. Some organizations using an input-based PAOs should ensure coordination between their approach may allow non-compliant members CPD monitoring and enforcement system and their to provide justification of how they maintained quality assurance processes. For example, practice competence using an output-based approach as a inspections/peer reviews can include a review of means of reducing sanctions. Nevertheless, given CPD compliance in conjunction with ISQC 1 where the importance of member competence, wilful appropriate. More broadly inspection results may disregard of CPD requirements – including the indicate competence gaps of firm members. When requirement to report learning activities – should there are identified competency failings, there should be seen as a serious ethics breach and sanctioned be an ability to impose additional CPD requirements. accordingly. Specific practice/peer review results that indicate failings in competence should result in increased CPD as remedial action. More broadly, general practice inspection/peer review results should inform CPD policies (e.g., common weaknesses could lead to more emphasis in offerings or requirements). 3.5.2 Reporting of results At the end of the CPD operational cycle (see Figure For example, CPABC issues an annual Regulatory 9), the results of the CPD process should be reported Report to the Public. An excerpt from the 2017-18 to the Board, and potentially to other stakeholders report39 follows: such as the membership, regulators, and the public. This requires that the PAO compile and evaluate the relevant statistics. Results that are valuable to be reported to the Board and/or committees include: •• Metrics on CPD offered/facilitated (number of sessions, hours of content, attendance rates). •• Metrics on attendance at sessions covering identified areas of general skill gaps or deficiencies in members. •• Summary of participant feedback and any notable patterns. •• Financial impact on the organization (departmental revenue and expenses). •• Results of monitoring (sampling method, compliance %). •• Disciplinary cases and results (per normal ethics reporting to Board/committee). Public reporting goes back to the communication messaging guidelines in Part 3.2.1 – it shows that the organization is taking CPD and member competence seriously and holds itself accountable to the public. 39 CPA BC, 2017-2018 Regulatory Report to the Public: Upholding the Highest Standards, online: CPA BC at 3. 54 PART 4 Developing and delivering engaging and effective CPD Highlights of Part 4 Developing competence in facilitating CPD sessions with adult learners requires insight into the specific needs and characteristics of adults as a participant group. Part 4 addresses the following themes to help CPD developers, presenters and facilitators become more effective teachers: •• General good practice in facilitation of engaging CPD sessions. •• Differences between young adult students and professionals with respect to learning expectations. •• How to motivate and support adult learners. •• Tips and techniques for effective instruction and facilitation with mature adult learners. Key questions addressed in Part 4 •• How to ensure that CPD activities are specifically developed and delivered to engage a professional ? audience? •• How to develop sustainable learning outcomes? A note on terminology Throughout this Guide you may have noticed the use of the terms “presenter” and “facilitator” with respect to CPD sessions. These words are often used interchangeably, but there is a subtle difference. Some CPD sessions (and some classes in general) primarily involve a one-way delivery of content, where a SME presents material without significant interaction with attendees. Facilitating a CPD session or class, on the other hand, requires that a significant portion of the session be interactive and include engaging learning activities that require active participation from attendees. Participants complete activities, usually in collaboration with their colleagues, and the session facilitator’s role is to guide the learning, ensure active participation, and debrief key messages. This part of the Guide focuses on how to develop and deliver material through engaging, facilitated sessions. 56 4.1 Elements of an engaging course 4.1.1 The importance of participant engagement Engaged participants are: •• knowledge learned is better retained through active participation. •• interested in learning. •• interested in the subject matter. •• if participants don’t retain the new skills, CPD is a waste of time. •• committed to actively participating in learning. •• one-way delivery is limited in effectiveness. •• willing to put in the effort. Engagement requires that participants’ interest is Engagement is essential because: maintained throughout the session. This requires •• competence requires that the knowledge learned active learning, where participants are required to is applied and retained. think, analyze, research, and/or discuss ideas during the session. This is also referred to as “learner- centred” education. 4.1.2 Achieving engagement To maximize engagement and effectiveness of CPD sessions, it is important to recognize that the member’s experience before, during, and after the Figure 13. Before, during, after… session are interconnected. Each of these factors plays in to a member’s overall experience and will Before During After impact how well they retain and are able to apply their new skills. This concept applies to any kind of course format – Advertising Arrival/login Follow-up in-class, online, etc. Different formats have different materials Registration Session limitations that need to be worked within, but it is process facilitation/ Survey of important that overall engagement be maximized to navigation feedback the extent possible within the context of each format Pre-session used. instructions Networking/ meal breaks Throughout the process, there are a number of steps that should be followed to help achieve engagement. These steps are outlined in Table 5. 57 Table 5. Steps to create engagement 1 ATTRACT THE RIGHT PEOPLE AND SET EXPECTATIONS Engagement depends on having To achieve this: participants in the course who: are interested in the content area. ensure the advertisement/communications are descriptive enough, including the type of activities involved. have sufficient prerequisite knowledge. do a pre-test if specific prerequisite knowledge is essential (self-assessed or graded for admission). understand what will be expected of them. lay out expectations at the beginning of the session, and state any key assumptions up-front. are engaged, participation must have a explain the “reward” and how to earn it (e.g., meaningful result and a lack of participation certificate on passing quiz; competence that can be must have consequences. applied on-the-job). 2 CONTROL THE ENVIRONMENT In order to engage, people need to: To achieve this: be comfortable (but not so •• ensure the room is big enough to accommodate the group comfortable that they become without crowding (facilitator should be able to walk between complacent). tables to guide discussions); •• use round tables for discussions and collaborative activities; •• control the temperature (cool) and lighting (bright); •• provide water, tea/coffee, snacks. avoid distractions. •• ssign seating so friends are separated (this reduces the a side conversations, keeps people on task, and allows for more interchange of new ideas); •• ask participants to put away mobile phones, etc.; •• make expectations clear regarding participation and focus; •• ensure regular breaks so participants can check in with the office/emails, network with colleagues, etc.; •• start and end the session on time – if participants are playing by the rules, so should the facilitator; have a sense of team or community. •• use icebreakers; •• use name tents so participants (and the facilitator) can call each other by name; •• consider competitive elements to motivate teamwork and participation. feel safe and valued when speaking up. •• set ground rules if needed; •• set an example as facilitator (positive reinforcement); •• address issues promptly if they arise; •• use anonymous polling for sensitive questions (especially where supervisors and subordinates are attending the same session). 58 3 INCLUDE EFFECTIVE LEARNING ACTIVITIES Effective learning requires: To achieve this: relevant content. •• map activities to a Competency Framework or set of learning outcomes; •• ensure content is current; •• refer to original sources where possible when developing course materials; enough context/background information to use introductory slides to present new material serve as a foundation. and
provide sufficient background. activities that challenge without being •• set activities at the right level for the group; overwhelming. •• use a variety of activities to match different learning styles and interests; •• have the teams be as diverse as possible to help each other learn, especially when the group is mixed and from different backgrounds. supportive facilitation to keep momentum. •• circulate throughout the room and listen in to discussions – support and re-focus discussions as needed; •• don’t interject too quickly – the learning will be more lasting if participants figure things out for themselves to some extent. consistent debriefing to re-iterate key points. debrief key points at the end of each activity. 4 FORWARD-LOOKING WRAP-UP Sustainability of learning requires: To achieve this: wrap-up that cements the learning assess learning outcomes through testing or self-assessment. outcomes. rewards for successful completion. •• provide certificates for successful completion or just recognition; •• consider small rewards, such as PAO-branded giveaways. plans for real-world application. set aside time at end for reflecting on future real-world application. resources for future reference. provide resources/links for future reference (at same time or as follow-up); participants should be equipped to go forward, and should have ongoing resources to refer to in the future. 59 4.1.3 When your “students” are professionals Effectively facilitating a CPD session where To deal with this issue, it is important to set participants are mature professionals is, in many expectations up front. Ask participants to ensure ways, different than teaching a classroom of their devices are silenced, and remind them that undergraduate students. Some of the key differences professional courtesy dictates that they be attentive are discussed below, along with some tips for and actively participate in the room and with their facilitating professionals: colleagues. If applicable, set parameters around what’s appropriate in a ‘paperless’ course offering. Facilitators and participants are colleagues Allow for regular breaks and make them long enough for participants to check email, network, In a typical education setting, the person at the front get a drink, and use the facilities as needed. When of the room is seen as the authority in the room and these expectations are set appropriately, most has the power to determine the “success” of those professionals will ignore routine issues going on in in the room (such as passing or failing a university their office, and will leave the room if an emergency student). In a CPD setting, however, the facilitator arises, to avoid disrupting their colleagues as well. should be respected as an expert, but does not have any power or authority over the group. This is why Distractions also occur when participants work setting expectations and stating assumptions up together and/or know each other well and engage front (step 1) are important. in side conversations during the session that are unrelated to the material at hand. Consider assigning seats so that participants work with people they Professionals may not expect to be forced to actively don’t know and thereby stay more focused on the participate session. Perhaps based on past experience, some professionals will expect that in a CPD session, they Professional conversations must be cautious of will be able to pay more attention to their emails than confidentiality requirements, and can be “chilled” the topic being facilitated in the room. To motivate by career politics active engagement, it is important that participation has meaningful results and that the lack thereof has It is important to address issues that are meaningful consequences. Results could be something formal, and challenging to the profession. Sometimes, such as earning a certificate, or could be informal, however, these conversations can encroach on such as the direct value of the learning itself and confidential information or can be sensitive to the resulting impact on the professional’s practice discuss. This can be particularly challenging when or profitability, and so on. If there is no result for professionals in the room are at mixed levels of active participation and no consequence for poor authority. Newer professionals may be hesitant to participation, it is easier for attendees to be less voice experiences or raise concerns that they believe active participants. their “superiors” may not approve of or agree with. Imagine, for example, that you are facilitating a session on ethics in the workplace and you want to Professionals face distractions from other obligations ask the group the extent to which they’ve witnessed If participants are distracted by events outside of the misconduct in their own organization. In this kind session, this negatively impacts the learning that can of situation, many participants will be hesitant to be achieved in the room. But with distractions, there’s volunteer information in public. a balancing act needed. When teaching university students, you may be able to “demand” attention For participants to be able to safely express their (even if you won’t be popular for doing so). With ideas, experiences, and opinions, anonymous polling professionals, however, they have responsibilities systems can be extremely beneficial. Anonymous outside of the session, and emergencies happen. polling allows for a more accurate picture of Regardless of how important the CPD topic is participant responses, and can allow for discussions to them, their office obligations will often be on sensitive issues without identifying individual perceived as a priority. If session materials are opinions or beliefs. In addition, it is important for the being used electronically rather than in printed form, facilitator to be mindful of any political tension in the the temptation for participants to check email or room, while at the same time making expectations otherwise be distracted might be even greater. clear. As another example, if you’re facilitating a session on diversity and inclusion, you need to ensure 60 participants understand that a lack of tolerance of to those expectations and show that you value other viewpoints will not be accepted in the room, their time and money. Plan in advance and be well and also serve as a role model in expressing opinions prepared, but also recognize that not every detail professionally and respectfully. can be controlled. The venue will sometimes make mistakes; participants will have things going on in Professionals have high expectations life and work that may distract them; technology will sometimes fail, etc. The facilitator should aim to With most CPD sessions, the professional (or their control what they can and be prepared to respond employer) has paid a fee to attend, and they expect and adapt quickly when the unexpected occurs. a certain level of quality. It is important to live up 4.2 Presentation methods and types of participant activities Developing and delivering engaging CPD requires Adding in video and audio from other sources may that facilitators use a variety of presentation methods not work well when working with simultaneous and activities to appeal to different learning styles translation, but can be effective when everyone and maintain participants’ attention and focus. The speaks the same language. In a multilingual longer a session is, the more activities should be environment, multimedia with very simple content or varied to avoid fatigue – both for the facilitator and fairly universal visuals can be used and/or a translated for participants. transcript of the audio provided. Wherever possible, participants should be engaged In terms of participant activities, there are a wide in activities where they collaborate with colleagues variety that can be used, examples of which are listed and “learn by doing.” Some foundational knowledge in Table 6. should be provided for most material to ensure that everyone has a starting point they can draw on. The Activities should be chosen that suit the material more instructional material being presented, the and vary the activities during the session. Don’t be greater the variety of different presentation methods afraid to push people somewhat out of their comfort that should be used. zone (for example, by getting them to present to the group, role play, etc.), but make sure that participants To present materials, facilitators can combine: are set up to succeed: •• Traditional “lecture style.” •• Give warning about more challenging activities to help people prepare; •• Videos or audio from other sources. •• Diagrams and visual aids. •• Be clear on the expectations; •• Demonstrations (tools, software, etc.). •• Give support and guidance to keep people on track; •• Stories, scenarios, case studies, and current •• Show confidence in their abilities. events. •• Guest speakers. Ultimately, developing session materials that vary in •• Using multiple facilitators. presentation style and include a mix of participant activities makes the facilitator role more rewarding and interesting, and makes the learning from these sessions more meaningful and lasting for participants. 61 Table 6. Activity types Activity type Notes on using the activity •• Pose a question and have participants discuss Focused discussions •• Can include web research if needed •• Debrief as a group •• Provide a case or a scenario (real or fictitious) Case or scenario •• Include discussion questions for participants to work through (and guide discussions them to be systematic in approach) •• Debrief as a group •• Can use a dedicated system or online tools (or simply a show of hands) •• May allow anonymous responses for sensitive questions •• May count for points (whether assessment or competition), or just for interest •• Can require research (such as in standards or online) Multiple choice •• Can use poll/re-poll method to help the group teach themselves (1. poll the question and show the responses; 2. without indicating the correct questions answer, have the group discuss and try to convince one another of their answer; 3. re-poll. If you have between 30% and 70% correct the first time, this should produce significantly better results on the re-poll and lead to interesting discussion) •• Place the emphasis on the discussion and rationale, rather than on the answer •• Have participants present their ideas to the group •• Structured (using screen or flipcharts) or informal from their table •• Better to do later in the session, once participants are more comfortable Team presentations in the setting and with the topic and their colleagues •• Other participants should ask questions, and offer comments/feedback •• Useful to build competence in areas such as communication, group decision-making, leadership, governance, etc. •• Have participants take assigned roles •• Act out a scenario or situation •• Debrief and ask others for how else it could be handled Role playing •• Better to do later in the session, once participants are more comfortable in the setting and with the topic and their colleagues •• Useful to build competence in areas such as communication, group decision-making, leadership, governance, etc. •• Have participants take sides on an issue •• Allow preparation, then have each side support their position and challenge the other position Debates •• Balance speaking time and ensure adequate debrief of the merits of each side •• Good for controversial issues with no clear “answer” •• Ask a question and have participants write their ideas or answers on flipcharts or stick their responses to the wall with sticky notes (or tape Out-of-seat exercises them up) (get people up and •• Rotate between stations (e.g., put a number of questions on flipcharts and moving around the have teams move from question to question, adding ideas or responses room) to the list) •• Physical activities (building a human 
pyramid, performing a skit, writing and even singing a song) 62 Sample CPD Resources from World Bank CFRR The CFRR held a multi-day training workshop for Accrediting CPD Trainers of Accountants and Auditors in Serbia as part of the STAR-CFR project40. The sessions included a wide variety of interactive learning activities to engage participants. The slide decks available on the CFRR website are intended to accompany this Guide. A comprehensive evaluation of CPD practices at the Chamber of Auditors of Serbia is included in the Appendix. In addition, the CFRR has implemented the EU-REPARIS Audit Training-of-Trainers Program, which brings together small and medium practitioners and PAO educators from Europe and Asia to engage in a peer-to- peer learning and knowledge exchange process. Many resources (including case studies) which can be used for CPD programs were developed through this program and can be download from the CFRR website41. 40 World Bank CFRR, Training-of-Trainers Program: Accrediting CPD Trainers of Accountants and Auditors in Serbia (May 2018), online: World Bank Group . 41 World Bank CFRR, EU-REPARIS: Audit Training of Trainers, online: World Bank Group . 63 PART 5 Including Ethics and Professionalism in the CPD Program Highlights of Part 5 Professional competence includes technical domains as well as professional skills, values, attitudes, and ethics. An organization’s CPD program must address both the technical and enabling competency areas. This part provides participants with tools to ensure CPD programs contribute to maintaining and developing the professionalism of accountants and auditors, particularly with respect to ethical attitudes and behaviours. •• Part 5 examines ways to ensure sufficient coverage of enabling competencies in a CPD program, including: •• Considering the inclusion of a mandatory requirement for ethics and professionalism content in a CPD program. •• Ensuring adequate coverage of enabling competencies in the catalogue of CPD offerings. •• Structuring sessions to integrate professional skills development, such as professional judgment and skepticism, teamwork, and communications. Key questions addressed in Part 5 •• How do enabling competencies fit into a CPD program? ? •• What are some effective ways of engaging members in ethics and professionalism topics? 65 5.1 Importance of ethics and professionalism in CPD programs As previously stated, the purpose of a CPD program Incorporating ethics and professionalism is to help protect the public by ensuring that in CPD programs professional accountants remain competent. When it comes to public trust, perception is a big part of Lecture-style materials can inform, but generally reality, so it is important that the public both see and do not develop these enabling competencies. understand the CPD requirements, and know that Facilitators need to engage participants in discussions professional accountants are responsible for meeting and lead interactive activities to build competence them. in a meaningful way. It is essential that professionals have well-rounded It is important that facilitators understand that some competence, including being able to demonstrate of these skills may be developed using examples not ethical decision-making and overall professionalism. related to accounting. Critical thinking, for example, Remember that technical competence alone only can be developed using any material. This provides creates a technician, not a professional. opportunities to approach the training in a unique way and get participants to think from a different Recall also (as discussed in Part 3.3.1) studies of perspective. It also adds the benefit of focusing on employers, clients, educators etc., often find that the enabling skill, rather than a technical skill. For the professional skills, values, ethics, and attitudes are example, using a case study to get participants to deemed (by employers, in particular) to be the most practice critical analysis, using an accounting case essential competencies for professional accountants. may lead them to focus on the correct accounting This means ensuring that these competencies are treatment, rather than the process of critically sufficiently covered and represented in CPD offerings. analyzing information. When using non-accounting Provincial CPA bodies in Canada, for example, require related materials, it is especially important to debrief members to complete at least 4 hours of verifiable the relevant learning so that participants understand business ethics-related CPD content during each how the skills relate to their professionalism – three-year rolling cycle. otherwise participants may miss the key points and messages. As explained in Part 3.3.1, ethics and professionalism for professional accountants are addressed in IES 3 Professional skills, and IES 4 Professional values, ethics, and attitudes.42 We’ll look at each of these in turn next. 5.2 Professional skills Recall from Part 3.3.1 that the learning outcomes Activities can combine technical and enabling provided in IES 3 can be useful in determining the competencies, for example by having participants range of professional skills that should be included research new accounting or auditing standards and in CPD. Table 7 provides ideas for including these presenting their research to the class. enabling competencies in learning activities, using the competence areas of professional skills from IES 3. 42 IES 3 and IES 4 are available as part of the “IAESB IESs”, supra note 5 66 Table 7. Including professional skills in CPD activities Competence area43 Examples of how to include Intellectual skills such as: •• Activities involving web research or researching accounting, auditing, or tax standards •• Research •• Scenarios or case studies •• Analysis •• Activities requiring logical reasoning and critical thinking •• Integration •• Critical thinking •• Dealing with unstructured problems Interpersonal and communication skills such as: •• Discussions at tables •• Cooperation •• Have individuals/teams report back to the full group •• Concise, clear, and persuasive written and oral •• Have participants interview each other communication •• Role play •• Cultural awareness •• Discussions about sensitive or contentious issues •• Effective listening •• Have participants present their ideas •• Interviewing •• Negotiating Personal skills such as: •• Have participants explore CPD options and develop an
output-based CPD plan (using a template) •• Commitment to lifelong learning •• Hold sessions on time management/project •• Open-mindedness management •• Time management •• Informal (unverifiable) activities like coaching, mentoring, •• Setting high personal standards of performance and performance review feedback discussions •• Anticipating challenges Organizational skills such as: •• Have participants evaluate each others’ responses •• Quality review of self and others •• Appoint roles among tables to require leadership and delegation •• Adherence to established practices •• Hold sessions on applying technology (Excel, audit •• Leadership, motivation, and delegation software, accounting software, etc.) •• Application of tools and technology 43 IES 3 is available as part of the “IAESB IESs”, supra note 5 67 5.3 Professional values, ethics, and attitudes Professional values, ethics, and attitudes are for more detail). Table 8 provides ideas for including supported by the learning outcomes provided in these enabling competencies into sessions, using the IES 4. Once again, these learning outcomes can be competence areas of professional values, ethics, and useful in determining the range of professional skills attitudes from IES 4: that should be included in CPD (refer to Part 3.3.1 Table 8. Including professional values, ethics, and attitudes in CPD activities Competence area44 Examples of how to include •• Use case studies with grey areas of what the correct action would be •• Have participants evaluate explanations critically Professional skepticism •• Contrast the difference between being skeptical and accusatory and professional •• Discuss the types of unconscious bias we all have, and ways to overcome those judgment biases to avoid being misled •• Include IESBA’s work in the area of professional skepticism and professional judgment45 and have participants discuss the issues •• Provide training on the code of professional conduct (using the IESBA Code46 or a national equivalent) •• Using case studies or scenarios, have participants determine the relevant rules Ethical principles and principles at issue and whether and how these were breached •• Have participants explain the fundamental principles in layman’s terms •• Provide and discuss extracts from real ethical cases in the profession or in a related profession •• Use case studies •• Review recent news stories where there were ethics failings Commitment to the •• Hold sessions on corporate social responsibility, triple-bottom-line accounting, etc. public interest •• Evaluate exposure drafts of new standards or laws •• Have participants discuss what they think appropriate sanctions would be for examples of breaches of the code The IESBA Code of conduct, the IESBA Code provides standards and guidance that are robust and relevant in any When developing and facilitating CPD materials context. The IESBA Code has been restructured in that aim to enhance professional values, ethics, recent years and is now clearer and easier to use, and attitudes, the IESBA Code47 is a key resource. with extensive guidance that facilitators can use to Regardless of whether there exists a national code raise discussions and analyze issues. 44 IES 4 is available as part of the “IAESB IESs”, supra note 5 45 IESBA, “Professional Skepticism Long-Term”, online: IESBA . 46 IESBA Code, supra note 1. 47 IESBA Code, supra note 1. 68 An example that addresses all 3 categories of professional values, ethics, and attitudes This is another example from CPA BC’s Gateway to Membership training course for new members48. During the session, participants are given the following background information, slightly adapted, and are asked to discuss the scenario in the context of the ethical principles: Background: In January 2018, six U.S. CPAs faced criminal and Securities Exchange Commission (SEC) charges for using information from the Public Company Accountability Oversight Board to benefit their firm. Research this story. Discuss: •• How do the IESBA Code’s Fundamental Principles apply in the context of the behavior alleged in this story? •• What would the public expect of CPAs in this situation? This activity combines: •• Using professional judgment to evaluate behaviors •• Explaining the ethical principles in terms of what the public would expect •• Discussing the impact on the public interest and the profession It also includes: •• Web research (intellectual skills) •• Reporting to the class (interpersonal and communication skills) 48 CPABC Gateway, supra note 39. 69 CONCLUDING COMMENTS We hope this Guide has provided valuable direction of competence. For maximum long-term impact, in implementing and maintaining CPD systems that don’t confuse rigor and rigidity with proper balance meet the international standards and good practice and perspective. Dynamic and flexible programs in ways that are practical and sustainable in the local can generate significant buy-in from members and context. A robust CPD program that communicates move them away from a “checkbox” mentality of its importance to members and engages members completing their CPD to a pro-active desire to learn in their pursuit of lifelong learning has the power and advance. to drive the profession forward to enhanced levels 70 APPENDIX CPD PRACTICES AT THE CHAMBER OF AUDITORS OF SERBIA A.1 Introduction A.1.1 Continuing professional development: role and significance Professional competence is a necessary precondition Maintaining professional competence in an ever- for financial reporting of high quality. The International changing world requires significant effort and Accounting Education Standards Board defines commitment to lifelong learning aimed at staying professional competence as the ability to perform a current with changes in relevant regulation and trends role to a defined standard. It states that professional in the business environment. For the International competence goes beyond knowledge of principles, Ethics Standards Board of Accountants this means standards, concepts, facts, and procedures and attaining and maintaining “professional knowledge that it represents the integration and application and skill at the level required to ensure that a client of technical competence, professional skills, and or employing organization receives competent professional values, ethics, and attitudes.49 professional service based on current technical and professional standards and relevant legislation.”50 49 International Accounting Education Standards Board, International Education Standard 4, Initial Professional Development – Professional Values, Ethics and Attitudes (Revised), New York, 2019, IAESB 50 International Ethics Standards Board for Accountants, International Code of Ethics for Professional Accountants™ (including International Independence Standards™), New York: IFAC, 2018, para 110.1 A1 71 A.1.2 Lifelong learning Lifelong learning in accounting and audit is performed For CPD to be effective it is important that it is planned, through the process of continuing professional relevant, and timely to the learning and development development (CPD). As a fundamental part of the needs of the professional accountant. Use of a CPD professional competence development process, framework can assist professional accountants in CPD contributes to the protection of public interest identifying learning and development activities to by ensuring that the public can trust the authority maintain and improve professional competence. of accounting knowledge and the judgment of CPD encompasses different activities, such as: (a) accountants. The process represents a continuation education, (b) training, (c) practical experience, of initial professional development (IPD), when (d) mentoring and coaching, (e) networking professionals first acquire necessary competences and sharing of knowledge and experiences, (f) for performing their duties. These competences observation, feedback, and reflection, (g) planned are primarily developed through formal university self-development and improvement activities, and education, work experience, and training programs. (h) unstructured gaining of knowledge.52 CPD enables those competences to be maintained and new competences acquired, taking account of The World Bank Implementation Guide on changes in the business environment and relevant Continuing Professional Development Programs for regulation. Accountants53 outlines the fundamental concepts of professional competence and the ethical and The International Education Standards51 specify the educational requirements for CPD programs to standards to be achieved in accounting and audit support that competence. It also addresses issues education. Standards 1 through 6 focus on IPD and of strategy and policy and suggests a systematic path 7 on CPD, providing for continuing development of to establish a CPD program in support the strategy. the learning outcomes achieved during IPD. A.1.3 Role of professional accountancy organizations One of the main goals of Professional Accountancy International Federation of Accountants (IFAC), while Organizations (PAOs) is the protection of public CAA has the status of Associate Member. As IFAC interest. Hence, it is a fundamental part of the member bodies both CAA and SAAA54 are required PAO’s mandate to ensure that all of its members to comply with the following rules on standards: maintain professional competence to perform their 1. IFAC member bodies shall promote the tasks in compliance with highest ethical and other importance of, and a commitment to, CPD professional rules and standards. While universities that develops and maintains professional provide accountancy and audit IPD in Serbia, CPD is competence – Paragraph A10. largely the remit of PAOs. The most significant PAOs in Serbia are the Chamber of Authorized Auditors 2. IFAC member bodies shall facilitate access (CAA) and the Serbian Association of Accountants to CPD opportunities and resources to assist and Auditors (SAAA). SAAA is a member of the professional accountants in meeting their 51 International Accounting Education Standards Board, Handbook of International Education Pronouncements, New York, 2019, IAESB 52 International Education Standard 7 – Continuing Professional Development (https://www.iaesb.org/system/files/meetings/files/2-3-IES-7-Exposure- Draft-Clean-Version.pdf) 53 Centre for Financial Reporting Reform, World Bank Group: Implementation Guide – Continuing Professional Development Programs for Accountants, Washington 2018. 54 According to the data collected by the CAA, less than 5% of its Members attended CPD Courses organized by the SAAA. 72 personal responsibility for CPD that develops professional accountant to demonstrate the and maintains professional competence – achievement of specified learning outcomes. Paragraph A11-14. b. Input-Based Approach (Paragraph A35–A40) 3. IFAC member bodies shall require all - 17. IFAC member bodies implementing professional accountants to undertake and an input-based approach shall require record CPD that develops and maintains a professional accountant to complete professional competence appropriate to a specified amount of learning and their work and professional responsibilities – development activity. Paragraph A15-22. 6. IFAC member bodies shall establish a systematic 4. IFAC member bodies shall specify the nature process to (a) monitor whether professional and extent of verifiable evidence professional accountants meet the IFAC member body’s accountants are required to maintain for CPD CPD requirements, and (b) provide appropriate that has been undertaken - Paragraph A15-22. sanctions for failure to meet those requirements – Paragraph A42-51. 5. IFAC member bodies shall establish an approach to measuring professional 7. IFAC member body processes for measuring, accountants’ CPD, by using one or both of the monitoring, and enforcement of CPD shall occur following approaches: on a specific and regular basis, typically annually – Paragraph A42 – 51. a. O utput-Based Approach (Paragraph A29– A34) - IFAC member bodies implementing an output-based approach shall require a A.1.4 Aim of this report This Report aims to assess the current provision of •• Formally introducing a measurement approach CPD in Serbia and identify areas for improvement. that combines output-based and input-based It looks primarily at the CAA, as the country’s most methods. significant and relevant institution dealing with all aspects of CPD, and considers the extent to which •• Expanding required CPD topics to include areas not well covered during IPD. Placing greater the current CPD program, activities, and performance emphasis on study of soft skills, including compare to best practices outlined in the World Bank professional ethics, and new areas, including CPD Implementation Guide. technology. The document concludes that the CAA complies •• Clearer definition of activities that can be verified with all CPD requirements defined by International as CPD and consideration of including additional Education Standard 7 and that the revised Law on activities such as formal education and writing Audit, expected soon, should contribute to the books. overall improvement of CPD. Some suggestions to further raise the quality and relevance of Serbian CPD •• Making better use of the CAA website for members to access and record CPD, and to practice are made, these focus on: deliver online courses. •• Encouraging better planning of CPD activities, with members making annual plans for at least 40 hours each year. 73 A.2 Continuing professional development in Serbia A.2.1 Legal requirements The current Program on Continuing Professional of: i) quality control reports; ii) current professional Development of Licensed Authorized Auditors was rules and legislation; iii) suggestions from auditors. created in accordance with the Law on Audit and There have been no changes since 2014 but a new approved by the Ministry of Finance, having received CPD Program is to be introduced in 2020. the prior opinion of the Audit Public Oversight Board. It was adopted by the CAA’s Assembly in The license to practice as an auditor must be renewed 2014, based on a proposal by the Committee for every three years and to be eligible the CAA requires Examination, Education and Continuing Professional its members to complete at least 120 CPD hours Development. This Committee is responsible for within that timeframe (i.e. 40 hours each year). Of this defining CPD topics and identifying the need for the first 60 hours must be training organized by an changes and additions to the Program taking account institution permitted by the Audit Public Oversight Board. A.2.2 The Chamber of Authorized Auditors Article 10 of the current Law on Audit defines the CAA Data provided by the CAA shows that in September as the main institution dealing with CPD activities 2019 its membership consisted of 311 individual in the country. This gives the CAA responsibility Licensed Authorized Auditors and 69 audit for the CPD Program, organizing CPD courses, companies. The Chamber’s membership represents: and maintaining statistics on Licensed Authorized Auditors participation. The Law allows for other •• 43 Licensed Authorized Auditors employed by the Big Four accounting firms; institutions to offer CPD activities with the permission of the Audit Public Oversight Board, especially: •• 101 Licensed Authorized Auditors employed in (1) higher education institutions, (2) PAOs and (3) 19 multinational audit companies excluding the audit companies. To date, no other institution has Big Four; acquired this permission, leaving the CAA as the •• 61 Licensed Authorized Auditors employed only institution formally organizing, conducting, and in 12 companies, each with at least 4 Licensed monitoring the CPD process in the country. Authorized Auditors, that are not multinational audit companies; According to the Law and the Program, every Licensed Authorized Auditor is obliged to attend •• 62 Licensed Authorized Auditors employed in CPD courses organized by the CAA, whether or not 32 companies, each with less than 4 Licensed they are CAA members. Verified course attendance Authorized Auditors, that are not multinational has an irreplaceable role in the process of their audit companies; license renewal. •• 44 Licensed Authorized Auditors not employed in audit companies. 74 The duration of membership is presented in Figure The geographical distribution of audit companies’ 14. headquarters between regions in Serbia, divided by 8 regions, is presented below: 4.18% •• Belgrade region – 55 members •• Figure 14. Duration of membership Južna Bačka region – 8 members 22.83% •• Mačva region – 1 member •• Srednji Banat region – 1 member •• Šumadija region – 1 member 58.52% •• Raška region - 1 member 14.47% •• Rasina region - 1 member •• Nišava region - 1 member. 80% of audit companies in the country are located More than 5 years Between 3-5 years in Belgrade which is where all CAA courses are held. Between 1-3 years Less than 1 year A.2.3 Required CPD Serbia’s Program requires CPD to continuously minimum 60 hours in the three-year period of the maintain the existing level of professional knowledge license. and to provide for its improvement. It specifies the following topics on which every Licensed Authorized The Program requires members to participate in 60 Auditor must maintain and improve knowledge: hours of CPD organized by the CAA, but it allows for more flexibility when it comes to the other 60 •• International Standards on Auditing; hours of CPD. Licensed Authorized Auditors may •• International Standards on Quality Control; enroll in courses, seminars, and training which are not organized by the CAA. They can also attend •• International Standards on Financial Reporting; training within audit companies, despite the lack •• International Standards on Financial Reporting of a formal agreement between the CAA and regarding SMEs; the companies. The CAA recognizes academic •• International Code of Ethics for Professional conferences and workshops, training for existing Auditors; or new roles, provision or receipt of coaching or mentorship, and development or delivery of CPD •• Current legislation relevant for the audit in relevant areas. Writing articles, papers, or books profession. can be also verified within the additional 60 hours of CPD, as can reading professional literature and In addition, the Program encompasses courses journals. Formal education may be verified as a identified as relevant from post-training CPD activity, but only within the additional 60 hours. questionnaires. Information gathered by inspectors Giving lectures can be regarded as CPD; if organized during quality controls in audit companies is also by the CAA it would be regarded within the CAA’s a significant input in determining and organizing 60 hours, if organized elsewhere it would fall within courses on particular subjects (the inspectors support the additional 60 hours of CPD. This information is auditors in the proper use of acquired knowledge in not clearly stated in the existing Questionnaire on their everyday work activities too). CPD of licensed authorized auditors (hereby after: Questionnaire), but will be clearly defined in the near The CPD Program defines that at least 10% of total future. The CAA will not verify practical experience in class hours is spent on each listed area, within a new professional role, networking, or self-directed or unstructured CPD. 75 A.2.4 Ethics and professionalism Ensuring Licensed Authorized Auditors depth CPD requirements set out by the CAA, see previous of understanding of the topics of ethics and section, require at least 10% of 60 hours on the professionalism are of concern in Serbia as none of Code of Ethics. This ensures some study of ethics the curricula of leading universities include these and professionalism but there are no additional as areas of study during IPD. The World Bank CPD requirements for engagement regarding these topics Implementation Guide states, "it is essential that beyond this. professionals have well-rounded competence, including being able to demonstrate ethical decision- Upon completion of ethics courses, participants are making and overall professionalism. Remember obliged to fill in specific questionnaires regarding the that technical competence alone only creates a topic. These encompass an output-based approach technician, not a professional.” CPD programs must to some extent, as they require participants to therefore include ethics and professionalism and present their personal opinion on particular practical make study of these topics mandatory. situations. A.2.5 Standards and requirements In order to ensure that Serbian CPD practice is in line ACCA) in order for them to be as relevant as possible with global standards, the CAA has looked towards for the current and future profession. The CAA has international practices and is continually working to entered a negotiation process with ACCA to acquire improve its practices to comply with International exemptions for its exams, as part of its efforts to Education Standards. The goal of the CAA is not to improve the quality of the profession in the country. simply fulfill the minimum legal requirements but to ensure that best practices are applied wherever The CAA ensures that staff responsible for CPD possible. education have relevant knowledge and practical experience in the industry. For example, only Licensed The significance of CPD is reinforced by shortcomings Authorized Auditors with a minimum five years of in IPD from universities in Serbia. Many universities work experience in statutory audits are allowed to in the country do not have ACCA exemptions, be CPD Program trainers in the areas of International despite having adequate curriculum for at least Standards on Auditing (ISA), International Standards some exemptions. A gap analysis conducted in 2017 on Quality Control (ISQC), International Financial by the World Bank compared global best practice Reporting Standards for Small and Medium sized (represented by ACCA requirements) with the local Entities (IFRS for SMEs) and the IFAC Code of Ethics education system in Serbia (represented by local, for Professional Accountants. state-run universities) and identified a number of shortcomings, especially regarding soft skills (see While most training still takes a traditional (teacher- section A4). centered delivery of information) form, the CAA has begun implementing more interactive forms of The CAA aims to improve its education and courses that better suit the needs of auditors in the examination practices (to align more closely with country. 76 A.2.6 Measuring and verifying compliance The CAA has mostly relied on an input-based •• Third part contains detailed information on time approach regarding CPD compliance of its members. period in which the auditor has conducted the The output-based approach is used informally; CPD and on how many hours of CPD he has inspectors, during quality controls in audit companies, conducted in the audit company in which he is identify the biggest knowledge gaps that should be employed, in seminars and workshops held in addressed as part of CPD. The CPD Implementation the Republic of Serbia or abroad that are related Guide recommends a move towards a combined to the topics defined in the Program of CPD approach and formally introducing output-based of licensed authorized auditors, literature that measures. he has covered related to the topics defined in the Program of CPD of licensed authorized In an effort to address the disadvantages of its auditors etc. For every stated element, auditor predominantly input-based system, the CAA has has to provide information on title of education, been increasing use of case studies and practical seminar, workshop etc, information on organizers, situations, as well as making continuous changes to duration, dates and number of hours completed. the program based on the experience of PAOs in other countries. That way, although the input-based CAA members are provided with sufficient and clear approach is taken, the CAA still ensures that its guidance related to CPD evidence to be created or members acquire the relevant skills and, importantly, obtained, and that records of CPD must be maintained that they are able to apply them in their working and presented on request. They are obliged to environment. periodically submit a declaration of fulfillment of professional responsibility and compliance with The CAA is the only organization that directly tracks CPD requirements. They are obliged to periodically/ its members’ enrollment in CPD courses; it records upon request provide verifiable evidence of learning attendance at courses it organizes and provides activities. The monitoring process itself is conducted this information to members on request (i.e. for the in regular cycles, a three-year period beginning purpose of renewing licenses in other countries or from the issuing/renewal of the license. The CAA for ACCA, Certified Public Accountant, etc.). Auditors has enough resources to effectively conduct the are obliged to self-report the additional 60 hours monitoring process as planned and designed, and of CPD by completing a questionnaire after each regularly reports publicly the extent to which its education course, seminar, or training (including for members comply with CPD requirements. courses taken online) which is submitted to the CAA for verification. As stated in the Law on Audit, if a member fails to comply with CPD requirements they are not able The Questionnaire is the same for all licensed to renew their license, enforced by the Ministry of authorized auditors. It comprises three parts that Finance. The CAA believes compliance measures are are related to self-evaluation: sufficient incentive for members to undertake CPD. •• First part in which licensed authorized auditor A loophole in the current Law on Audit, allowing signs the statement that the information that he auditors who did not complete an adequate amount provides in the Questionnaire is correct, and of CPD hours to apply for a new license instead of that he is willing to provide the CAA with the renewing the one they had, will be resolved in a documents that verify the stated information; revised Law on Audit expected to be adopted soon. •• econd part contains general information about S a licensed authorized auditor that answers the Questionnaire; 77 A.2.7 CPD trainers and lecturers Only Licensed Authorized Auditors with more than a significant proportion of CAA members). Other five years of professional experience are qualified to big audit companies have also provided lecturers lecture or offer training on the specified listed topics. to conduct courses. In addition, there have been In most cases, the CAA relies on its own members lecturers employed by the Ministry of Finance, to conduct courses. Prior to 2013, courses were also Administration for Prevention of Money Laundering, conducted by university professors but these were the National Bank of Serbia, Securities Commission, found to be too heavily weighted towards theoretical etc. concepts rather than practical issues. Questionnaires, filled in by participants upon completion of courses, There is no formal process for lecturers/trainers to confirm that the most valued courses help participants become licensed or qualified to run CPD training. deal with everyday problems encountered in their Instead their performance is assessed based on work; include practical case studies and best practice responses in the questionnaires completed by examples; and/or address changes in regulation and participants at the end of a course. These are submitted standards. Most courses are delivered by lecturers to the Committee for Examination, Education, and who are members of the CAA and employed by one Continuing Professional Development and used to of the Big Four accounting firms (which also employ decide whether to engage the lecturer for future courses. A.2.8 Courses organized by the CAA The CAA is legally obliged to provide at least 20 i.e. the World Bank), the CAA is to notify its members hours of CPD courses each year. In October 2019, well in advance. the CAA organized a three-day CPD course, intended primarily for Licensed Authorized Auditors. The CAA The CAA’s CPD program is also available to non- also organized an education program on IT audit at the members. In the previous three-year period, the end of November 2019, and a webinar on the same CAA provided training to almost 450 participants topic. In addition, the CAA has contributed to the annually, including an average of 138 non-member education of auditors through a number of different participants. These non-members generate seminars, webinars, public discussions, etc. In 2019, additional revenues from CPD activities that can be for example, the CAA held a one-day education used to improve the overall quality of the courses, event, in cooperation with the Administration for the i.e. by hiring foreign lecturers, better use of modern Prevention of Money Laundering, on the draft Law technologies, and the ability to include a broader on Audit and draft Law on Accounting. Members are range of topics, etc. also encouraged to enroll in courses organized within the “Računaj na podršku” (Count on our support) The World Bank has supported the CAA in different project. The CAA also prepares and delivers regular aspects of its CPD Program. CAA employees CPD programs for its members in electronic form responsible for and engaged in the CPD curriculum (online courses and webinars). (especially members of the Administrative and Professional Service Body, the Committee for The CAA’s CPD courses are generally held during last Examination, Education and CPD, and Quality Control two weeks of October. Participants’ views are sought Inspectors) have attended seminars and webinars each year regarding the possible introduction of organized by the World Bank. The World Bank has additional/alternative times for organization of those provided the CAA with seminar materials, as well courses. If additional courses are organized during as information on the most recent changes in the the year (either by the CAA or by other institutions - application of audit and accounting standards. CAA 78 officials believe that more frequent participation in expensive to hire professional translators. Another courses and seminars organized by the World Bank institution that has had a significant impact on the would improve the quality of the audit profession in CPD process of the CAA is the Dutch NBA (Koninklijke Serbia, but some members have trouble following Nederlandse Beroepsorganisatie van Accountants). courses in foreign languages (i.e. English) and it is A.2.9 Recent topics covered During the period from the beginning of 2017 until •• Going Concern (ISA 570р) the end of 2019, the following topics were covered as part of CPD courses organized by the CAA: •• Key Audit Matters (ISA 701) •• ISQC 1, Code of Ethics and Quality Control •• Communication with Those Charged with Governance (ISA 260р) Findings •• Evaluation results of the Council of Europe •• Use in Practice regarding audit profession, belonging acts and •• Assessing the Risk of Material Misstatement (ISA how they should be written in compliance with 315) relevant legislation •• Code of Professional Ethics for Authorized •• Writing of control lists in compliance with relevant Auditors legislation •• Lectures by Representatives of the Administration •• ISA 701 – New Audit Report: Introduction of Key for the Prevention of Money Laundering Audit Matters •• Lectures by Representatives from the Ministry of •• ISA 701 - New Audit Report: Writing of the Finance Statement scheme •• ISA 620 Using the Work of an Auditor’s Expert •• ISA 701 - New Audit Report: Going Concern and •• Overview of audit procedures, with comments on Other Information most frequent shortcomings in a quality control •• IAS 7 – Cash flow process •• IAS 10 – Subsequent Events •• Lectures by Representatives of the Administration for the Prevention of Money Laundering •• IAS 24 – Related Parties •• Overview of audit procedures, with comments on •• IFRS 16 Leases most frequent shortcomings in a quality control •• IFRS 9 Financial Instruments process •• Code of Professional Ethics for Authorized •• Cash flow Statements (Significance, Analysis, and Auditors Control; ISA 7) •• Lectures by Representatives from the Ministry of •• Revenue from Contracts with Customers (IFRS 15) Finance •• Introductory part – Why were the Standards •• ISA 300, ISA 315 and ISA 330 Planning an Audit, updated? Risks and Responses to Assessed Risks •• Forming an Opinion – first part (ISA 700р) •• Lectures by Representatives of the Administration for the Prevention of Money Laundering. •• Forming an Opinion – second part (ISA 705р, ISA 706р and ISA 720р) 79 A.2.10 Other CPD programs As previously mentioned, relevant courses organized It should be also stressed that a number of CAA by other institutions can be verified as CPD. Many members participated in seminars organized under Licensed Authorized Auditors take part in education the STAR-CFR project, which is supported by the World programs organized by the audit company they work Bank and financed by the Swiss Government. The for, and also enroll in different programs organized project is aimed at improving the overall investment by international institutions. The most frequently climate in the country; ensuring the reliability of covered topics regarding the additional 60 hours financial data is a key element and therefore is in of CPD are from the areas of audit, accounting and line with the CPD Program’s goals. Also, a number of quality control. CAA members enrolled in seminars organized by the “Privredni savetnik” (the Economic Advisor), a leading financial consulting and accounting company with over 60 years’ experience. A.2.11 Financial performance and promotion The CAA’s CPD courses are financially self- importance of CPD. It promotes a variety of CPD sustainable, with revenues exceeding costs. In offerings to its members including those offered by addition to improving the overall knowledge of other organizations. For its own courses it posts on auditors, and hence building trust in the profession the CAA’s web page and emails members and other by the business community in the country, CPD individuals who could be interested in the topics. activities have also contributed to the CAA’s total One of the most important channels of promotion revenues, accounting for approximately 5% of is word-of-mouth, when satisfied participants share revenues annually. The Regulation on Education their experience directly with broader groups of Fees, which was created in accordance with the Law people. This has attracted non-member participants, on Audit and with the approval of the Ministry of including from surrounding countries. After every Finance, officially established the fee for attending session, the CAA conducts a survey among session CPD sessions organized by the CAA. These fees are participants in order to assess and maintain quality 50 EUR per day of the course and can be subject to and ensure continued interest from non-members. change only when foreign lecturers are involved. Survey basically contains feedback that CAA uses to The CAA does not charge any fees to participants continuously improve its CPD program. for taking part in webinars. The CAA also cooperates with its members’ The CAA has made efforts to promote the CPD employers to reinforce the importance of CPD, since Program and its value and significance for professional all audit companies licensed to conduct audits in the development. It uses the internet, newsletters, public Republic of Serbia are members of the CAA. events, and assembly meetings to communicate the 80 A.3 Suggestions for improvement of CPD practice in Serbia The Law on Audit determines CPD practice in The CAA complies with all of the requirements Serbia. The introduction of a new revised Law on regarding CPD practice defined by International Audit, expected soon, should contribute to the Education Standard 7. The CAA has actively promoted overall improvement of CPD. It will place even more its CPD courses and their value for maintaining emphasis on the significance and irreplaceability of and developing professional competence and has CPD and is expected to close the loophole allowing required its members to report on courses attended auditors to apply for a new license if a lack of verified outside the CAA by filling out a standardized CPD prohibits them from renewing the existing Questionnaire. one. The CAA expects that the new law will support improvements in the overall quality of audit practice However, the following changes could be introduced in the country. to further improve the quality and relevance of Serbian CPD practice: A.3.1 Planning CPD activities The CAA should motivate its members to take a from other providers/sources). This will ensure that more systematic approach to their CPD activities. Licensed Authorized Auditors continually work on First, members should define their development their professional competence each year. Members objectives each year and encompass them in should also be allowed to make flexible plans so individual CPD plans. Such objectives could be that they could transfer additional hours completed defined with reference to changes in relevant within one year to the next. regulation, their individual weaknesses, additional skills they would like to acquire, etc. Upon completion, members would be expected to elaborate the undertaken activities and the way those On the basis of the plan, members should attend and addressed particular development objectives to the undertake courses/activities that would contribute to Chamber, by submitting a formal report at the end of the development of needed knowledge and skills. a year. Moreover, using the same report, members The CAA should motivate members to define their should describe the impact of the learning activities annual CPD plans, with at least 40 hours of CPD on their work performances and overall knowledge. each year (of those, minimum 21 hours of courses This could also help to formally introduce the output- organized by the CAA and the other 19 hours based measurement model. A.3.2 Measurement approach The CAA has already informally implemented comprehensive assessment of the importance of elements of the output-based approach, through CPD activities to the overall knowledge of auditors in their quality control processes in audit companies. the country. This would enhance existing input-based However, this measurement approach should be measurements to provide for better assessment of formally introduced to its full extent, since a combined all candidates’ activities. measurement approach would provide for more 81 A.3.3 CPD topic requirements To address identified shortcomings in the formal •• More case studies and critical thinking exercises, education of accountants and auditors in Serbia, an effective way of delivering learning on these PAOs could specify topic areas to be studied as a topics that has already been embraced by the formal CPD requirement. CAA. CPD programs should place greater emphasis on Since engagement partners have a greater level professional ethics (and other soft skills mentioned of responsibility and greater impact on the quality in the analysis above) in addition to technical of the country’s financial reporting, introduction competencies. The CAA has created a solid basis for of additional CPD requirements for engagement the following recommended further improvements partners should be considered as well. This is in this area: especially relevant for topics related to new industry •• Expanded coverage of ethics and professionalism trends and ethical considerations connected with beyond the official Code of Ethics for Authorized such trends (for example on ethical considerations Auditors; in the process of auditing of IT companies). •• Inclusion of more learning opportunities related The CAA could also establish a special register to ethics and professionalism (due to IPD of employers whose working activities could be shortcomings in this area); regarded as CPD for its members. Hence, members •• Introduction of additional requirements would be able to complete a particular number of for engagement partners on ethics and CPD hours by changing their role within the company professionalism; or by taking on new job responsibilities. A.3.4 CPD activities recognized by the CAA The CAA should clearly define activities that can be The CAA should adopt a more flexible approach regarded as CPD and for how many hours. Clear towards different acceptable CPD activities (e.g. guidelines on the number of hours able to be spent book writing) that they will verify for CPD hours. on different activities and topics would help ensure This helps professionals to customize their CPD in diversity of CPD undertaken by members. accordance with their aspirations, resulting in better use of required CPD hours. Considered should be given to including and recognizing additional formal education (e.g. MBA The CAA should consider offering different types of studies) as CPD activity. This should be accompanied CPD curricula in accordance with the level of activity by permission for professionals to transfer their CPD of an accountant/auditor, with adjusted requirements hours to the next year if the duration of the formal for the number of CPD hours. These flexible plans education program was greater than the required should be introduced as optional for semi-retired CPD time for a single year. or part-time accountants/auditors (for ACCA this is engagement of up to 17,5 hours per week). The CAA should continue to introduce engaging methods of learning to programs it organizes. The From a strategic perspective, in order to make CAA should work with university faculties in Serbia the most out of the CPD practices in Serbia, it is offering IPD to support them to better comply with recommended that better coordination between ACCA and other international standards and acquire PAOs, employers, and universities is achieved. This ACCA and other accreditations for their courses. would not only improve the existing CPD practices but would also contribute to the improvement of accounting and auditing education overall. 82 A.3.5 Use of technology The CAA could use its online presence more effectively The CAA should also consider delivering its own on CPD. It should make more detailed information online courses through the website, for an additional on the whole CPD process available on its website, fee, with the hours automatically being registered especially CPD requirements and information on for each participant. Online courses present an recognized CPD activities. Each member should be additional revenue source for the CAA and would able to create a profile on the CAA’s website and have facilitate further improvement of the quality of CPD access to all relevant information regarding their CPD courses. Moreover, good online CPD courses would progress. Members should be able to verify their attract more non-member participants and could CPD hours by filling an online Questionnaire, while hence provide more revenue. the CAA’s courses would automatically be included in the total number of completed CPD hours. A.4 Annex: Shortcomings in initial professional development The significance of CPD is reinforced by shortcomings A gap analysis conducted by the World Bank in 2017 in IPD from universities in Serbia. Many universities in compared global best practice (represented by the country do not have ACCA exemptions, despite ACCA requirements) with the local education system having adequate curriculum for at least some in Serbia (represented by local, state-run universities) exemptions. and identified a number of shortcomings, especially regarding soft skills. A.4.1 Comparison between university education and best practice The Faculty of Economics in Belgrade is the only despite subject curricula that are in compliance with faculty in Serbia that has received ACCA accreditation ACCA requirements. for its undergraduate studies. That way, ACCA recognizes some exams passed at the Faculty and During analysis of the curriculum creation process provides potential candidates with six exemptions at the universities, it was identified that the business from ACCA qualification exams, for students majoring community was not involved. Also, curricula do in Accounting & Audit. Faculties in other universities not include obligatory internships or any other in the country (Novi Sad, Kragujevac and Niš) have participation in practical projects. This means recent not received ACCA recognition and their students graduates may lack necessary practical knowledge receive no exemptions from the qualification test, regarding the implementation of audit procedures. 83 Non-technical or “soft skills” are required to be CPD builds on the foundation laid by formal university included in university programs under national education and topics are generally more related to accreditation standards, but implementation is everyday practice than theoretical concepts and often lacking in practice. Collaboration with PAOs models. But because of identified shortcomings, and implementation of more competency-based CPD in Serbia addresses not only the continuing learning and assessment methods could facilitate development of professionals, but also supplements these types of improvements. some of the identified IPD lacking in universities’ curricula. PAOs are not involved in the design of university curricula or implemented teaching methods. There is no clear delineation of what is taught at universities and what is covered by PAOs. Better coordination between PAOs and universities would improve the overall quality of the education system of accountants and auditors in Serbia. The most significant gap between academic education in Serbia and ACCA benchmark exists in the aspect of soft skills. Undergraduates also performed poorly in certain technical competencies – especially in management and ethics, performance management and decision making, management techniques, preparation of financial statements, audit testing and reporting, and principles of financial management. Generally, areas of technical competencies need only limited modification to address identified gaps, while the inclusion of non-technical competencies (critical thinking, ethics in business, communication, leadership, problem solving, etc.) would represent a significant improvement. 84 87