Global Accountancy Education Benchmarking Development for SEEPAD WB REPARIS, Vienna March 14, 2006 Accountancy Education in the Region Presentation by Dr. Gert H. Karreman

World Bank REPARIS Accountancy Education in the Region Benchmarking for SEEPAD: support professional development by making available a benchmarking methodology that can be used to identify strengths and weaknesses in the professional qualification of accountants and auditors; and to measure progress over time towards sustainable institutional capacity

World Bank REPARIS Accountancy Education in the Region Partners in Benchmarking SEEPAD General Assembly SEEPAD Country Participants GAEB Network Resource Team GAEB External Assessors USAID and CARANA Corporation DePaul University

World Bank REPARIS Accountancy Education in the Region South Eastern European Partnership on Accountancy Development SEEPAD member bodies are taking responsibility for qualification standards Accountancy standards are set in legislation Professional bodies are uniquely positioned for partnerships

World Bank REPARIS Accountancy Education in the Region SEEPAD Countries and Professional Bodies Albania – IEKA, Albanian Institute of Authorised Chartered Auditors Bosnia & Herzegovina – AAARS, Association of Accountants and Auditors in the Republika Srpska Bulgaria – ICPA, Institute of Certified Public Accountants in Bulgaria Kosovo – SCAAK, Society of Certified Accountants and Auditors of Kosovo

World Bank REPARIS Accountancy Education in the Region SEEPAD Countries and Professional Bodies Macedonia – AAFA, Association of Accountants, Financial Workers and Auditors of the Republic of Macedonia Moldova – ACAP, Association of Professional Accountants and Auditors of the Republic of Moldova Montenegro – IRRCG, Institute of the Association of Accountants of Montenegro

World Bank REPARIS Accountancy Education in the Region SEEPAD Countries and Professional Bodies Romania – CAFR, Chamber of Auditors in Romania Romania – CECCAR, Body of Expert and Licensed Accountants of Romania Serbia – SRRS, Serbian Association of Accountants and Auditors

World Bank REPARIS Accountancy Education in the Region Relevance of Regional and Global Approaches to Qualification for SEEPAD Regional programs are cost effective for smaller countries Regional access to advanced international expertise Reform is encouraged at a regional level

World Bank REPARIS Accountancy Education in the Region Possible Areas for SEEPAD Cooperation Qualification standards and professional requirements Regional recognition as a basis for EU recognition Examination content and structure Program development for education and CPD Practical experience requirements

World Bank REPARIS Accountancy Education in the Region Reasons for Benchmarking Compare systems of accountancy education with international standards and examples of best practice Support decisions of the professional bodies for future development Measure progress over time Facilitate global trading in accountancy services

World Bank REPARIS Accountancy Education in the Region Accountancy Education Professional qualification and licensing requirements, including an examination of professional competence at university final examination level which guarantees that the theoretical knowledge and the ability to apply that knowledge have been obtained

World Bank REPARIS Accountancy Education in the Region Accountancy Education (continued) Professional education requirements, covering the whole range of subjects necessary for accountants and auditors, as defined by IFAC in the IES and the European Union in the EU 8th Directive

World Bank REPARIS Accountancy Education in the Region Accountancy Education (continued) Practical experience requirements, primarily in the accounting and auditing function, in a suitable professional environment, under supervisors providing adequate guarantees regarding the standard and content of training

World Bank REPARIS Matrix of Accountancy Education Influence of the Accountancy Profession on Accountancy Education Country Characteristics Cultural background Legal system Economic position Higher education Accountancy Education Professional qualification Qualification standards Final examination of professional competence Professional education Practical experience General education International Developments Standards Guidelines Directives

World Bank REPARIS Accountancy Education in the Region Self Assessment with External Validation Local experts with up-to-date knowledge of the present situation conduct the self assessment External and independent assessors validate the results of the self assessment to achieve internal relevance and external credibility Multiple indicators mark the priorities for development

World Bank REPARIS Accountancy Education in the Region Multiple Indicators 1.Urgent development, no local expertise, external support needed 2.Critical deficiencies, some local expertise, external support needed to comply with IES in a reasonable time 3.Material deficiencies compared with IES, external support may be needed 4.Sustainability, necessary change can be achieved without external support

World Bank REPARIS Country Traffic Lights

World Bank REPARIS Accountancy Education in the Region Professional Characteristics Members and New Members Continuing Professional Development Qualification Standards International Recognition Higher Education Final Examination

World Bank REPARIS SEEPAD Professional Characteristics

World Bank REPARIS Accountancy Education in the Region Professional Characteristics International recognition of professional qualifications in the region is urgently needed. Assessment procedures and examination infrastructure require improvement CPD programs lack qualified trainers, course content and a balance between theory and practice

World Bank REPARIS Accountancy Education in the Region Education and Training Professional Education Accounting, Finance & Related Knowledge Organizational & Business Knowledge Information Technology Skills, Values, Ethics & Attitudes Practical Experience Providers of Practical Experience

World Bank REPARIS SEEPAD Education & Training

World Bank REPARIS Accountancy Education in the Region Education and Training In general inadequate resources for teaching and training in organizational and business knowledge, IT and in skills, values, ethics and attitudes Practical experience requires mentoring by qualified professionals in a suitable professional environment

World Bank REPARIS Accounting, Finance & Related Knowledge

Core accounting education and training is weak in the critical areas of management accounting & controls, audit & assurance, professional values & ethics, and financial accounting & reporting

World Bank REPARIS Organizational & Business Knowledge

Core business education is not provided in sufficient depth in corporate governance, financial markets, organizational behavior, international business & globalization, management & strategic decision- making and in skills, values, ethics and attitudes

World Bank REPARIS Skills, Values, Ethics & Attitudes

Practical training in ethics, professional education in ethics, and technical and functional skills for accountants and auditors to competently perform assigned tasks need strengthening Ethics and values are covered superficially

GAEB World Bank Presentation Concluding Remarks Urgent and critical gaps in compliance with international standards have been identified. Working with international standard setters, donors and other stakeholders can close these gaps.

GAEB World Bank Presentation Concluding Remarks Development will contribute to regional and global economic integration, increased trade and investment, better access to risk-based credit, -

GAEB World Bank Presentation Concluding Remarks -- and will result in increased public and private sector confidence, and trust in the accountancy profession, and in the reliability and comparability of financial reporting and auditing