Maintaining your professional competence as a Practising Accountant


By: CPA Henry Nabaasa

Before we rolled out the CPD assessment exercise to the 410 Practising Accountants, we decided to begin the exercise with an assessment of the Standards and Regulations team. With over 150 CPD hours I had obtained in 2019, I was a bit astonished when I received my CPD compliance report indicating that I was partially-compliant.

The story is not different for the majority of the practising accountants. On receiving their 2019 CPD compliance reports, many practitioners were stunned that they had been classified as non-compliant or partially-compliant. Some could not hide their disappointment over the phone. “But I had well over 40 hours!” they bellowed, “this report is not mine. It is for Catrina Zumba.”

Catrina Zumba is the name of the hypothetical practitioner for whom we had developed a sample CPD record, for guidance purposes. At the end of the telephone conversation, many of the practitioners had a totally different point of view. Many of them submitted revised CPD record forms that were direct opposites of what they had submitted at first. CPD compliance is not exclusively about obtaining 40 CPD hours.

Indeed, 2019 CPD analysis indicated that although 67% of the practising accountants had obtained a minimum of 40 CPD hours, only 6.3% obtained CPD relevant and appropriate to their work and professional responsibilities. This implies that 93.7% of the practising accountants obtained CPD hours without thinking about the relevancy of the training obtained.

As practising accountants, responsible for audit engagements, your CPD obligations are stated in International Education Standard (IES) 8 (Revised). IES 8 was developed and approved by the International Accounting Education Standards Board (IAESB); a body that develops Education Standards, guidance and information papers on pre-qualification education, training of professional accountants and Continuing Professional Development (CPD). The Standard was effective from 1 July 2016.

IES 8 prescribes the professional competence that professional accountants are required to develop and maintain when performing the role of an Engagement Partner responsible for audits of financial statements.  This protects the public interest, contributes to audit quality, enhances the work of Engagement Partners and promotes the credibility of the audit profession.

‘International Education Standard (IES) 7, Continuing Professional Development’ requires all professional accountants to develop and maintain professional competence relevant and appropriate to their work and professional responsibilities. IES 8 applies IES 7 requirements to the role of an Engagement Partner.

IES 8 recognizes that although most Engagement Partners have already developed the professional competence to assume that role, they operate in an environment of significant change. Pressure for change can come from increased regulation, developments in financial and non-financial reporting requirements, emerging technologies, increasing use of business analytics and business complexity. These changes require the Engagement Partners to maintain and further develop professional competence throughout their careers.

It is the responsibility of the professional accountant performing the role of an Engagement Partner to develop and maintain professional competence by undertaking relevant CPD activities, which include practical experience.

IES 8 requires practising accountants to develop and maintain professional competence that is demonstrated by the achievement of learning outcomes including, but not limited to, those listed in table A below:

Table A: Learning Outcomes for the Professional Competence of an Engagement Partner

Audit Lead the audit through active involvement during all phases of the audit engagement.Lead the identification and assessment of the risks of material misstatement.Develop an audit plan that responds to the risks of material misstatement identified.Evaluate responses to the risks of material misstatement.Conclude on the appropriateness and sufficiency of all relevant audit evidence, including contradictory evidence, to support the audit opinion.Evaluate whether the audit was performed in accordance with International Standards on Auditing or other relevant auditing standards, laws, and regulations applicable to an audit of the financial statements.Develop an appropriate audit opinion and related auditor’s report, including a description of key audit matters as applicable.
Financial accounting and reporting Evaluate whether an entity has prepared, in all material respects, financial statements in accordance with the applicable financial reporting framework and regulatory requirements.Evaluate the recognition, measurement, presentation, and disclosure of transactions and events within the financial statements in accordance with the applicable financial reporting framework and regulatory requirements.Evaluate accounting judgments and estimates, including fair value estimates, made by management.Evaluate the fair presentation of financial statements relative to the nature of the business, the operating environment, and the entity’s ability to continue as a going concern.
Governance and risk management Evaluate corporate governance structures and risk assessment processes affecting the financial statements of an entity as part of the overall audit strategy.
Business environment Analyze relevant industry, regulatory, and other external factors that are used to inform audit risk assessments including, but not limited to, market, competition, product technology, and environmental requirements
Taxation Evaluate procedures performed to address the risks of material misstatement in the financial statements in respect of taxation, and the effect of the results of these procedures on the overall audit strategy.
Information technology Evaluate the information and communications technologies (ICT) environment to identify controls that relate to the financial statements to determine the impact on the overall audit strategy.
Business Laws & regulations Evaluate identified or suspected non-compliance with laws and regulations to determine the effect on the overall audit strategy and audit opinion.
Finance & Financial management Evaluate the various sources of financing available to, and financial instruments used by, an entity to determine the impact on the overall audit strategy.Evaluate an entity’s cash flow, budgets, and forecasts, as well as working capital requirements to determine the impact on the overall audit strategy.
Interpersonal and communication Communicate effectively and appropriately with the engagement team, management, and those charged with governance of the entity.Evaluate the potential impact of cultural and language differences on the performance of the audit.Resolve audit issues through effective consultation when necessary.
Personal Promote lifelong learning.Act as a role model to the engagement team.Act in a mentoring or coaching capacity to the engagement team.Promote reflective activity
Organizational Evaluate whether the engagement team, including auditor’s experts, collectively has the appropriate objectivity and competence to perform the audit.Manage audit engagements by providing leadership and project management of engagement teams.
Commitment to the public interest Promote audit quality and compliance with professional standards and regulatory requirements with a focus on protecting the public interest.
Professional skepticism and Professional judgment Apply professional judgment in planning and performing an audit and reaching conclusions on which to base an audit opinion.Promote the importance of the application of professional skepticism during all phases of the audit engagement.Apply professional skepticism to critically assess audit evidence obtained during the course of an audit and reach well-reasoned conclusions.Evaluate the impact of individual and organizational bias on the ability to apply professional skepticism.Apply professional judgment to evaluate management’s assertions and representations.Resolve audit issues using critical thinking to consider alternatives and analyze outcomes.
Ethical principles Promote the importance of compliance with the fundamental principles of ethics Evaluate and respond to threats to objectivity and independence that can occur during an audit

Other factors may require a practising accountant to obtain more learning outcomes than those listed in Table A above. These factors include but are not limited to the portfolio of clients, the extent of any changes in auditing and financial reporting standards and the impact of changes in legal and regulatory requirements.

It is important that that all practising accountants focus on enhancing and maintaining the competencies, skills, values and attitudes relevant for their work.

The trick is to use the learning outcomes in IES 8 as prompts to remind the practising accountant of all the competencies expected of an Engagement Partner and to design a training plan that addresses the different technical and non-technical areas.

It is incredibly useful that each practising accountant, at the end of the year, reflects on the CPD activities undertaken; what was learned; how they have applied the learning to their engagements and management of the practice; and whether there are any gaps to close.

CPA Henry Nabaasa is a Quality Assurance Officer at the Institute of Certified Public Accountants of Uganda.


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