While significant steps have been made toward harmonizing international accounting standards, there is also strong support for the development of a harmonized set of qualifications for entry into and practice in the profession. The organization taking responsibility for this task is IFAC - the International Federation of Accountants. This paper provides an update to an original investigation of the issue conducted in 2004. Its aim is to monitor the progress of IFAC's mission by investigating the revised education standards required of IFAC members, changes in member bodies, and the level of adoption of International Financial Reporting Standards since the previous study.
Keywords: IFAC, IFRS, IAESB, Harmonization of standards, Qualifications of professional accountants, Global accounting profession, Reciprocity
Introduction and Purpose of the Study
While significant steps have been made toward the acceptance and use of International Financial Reporting Standards (IFRS), there is also strong support for common credentials for professional accountants - that is, the development of a harmonized set of educational qualifications for entry into and practice in the profession. While IFRS will provide financial statements that are accepted globally, harmonized education standards for professional accountants may lead to freer movement and utilization of professional accountants globally.
This study revisits research conducted in 2004 (Hall & Sen, 2004) that reported on the progress of the International Federation of Accountants (IFAC) toward achieving global educational standards and the existence of reciprocity agreements among IFAC member countries. IFAC has been a key player in the considerable improvement in quality of professional accountants in its membership, representing accountants globally and in all sectors of the profession. At the time of the original study, IFAC had passed several initiatives designed to promote harmonization and reciprocity, with adoption dates ranging from 2005 to 2007. This paper provides a progress report on the effects of those and newer IFAC initiatives by refocusing the study on its education-based initiatives and updating the data set. More attention is given to the regional professional organizations and groupings acknowledged by IFAC, the levels of adoption of IFRS by IFAC member bodies, and the possible effects of culture and national economics on attempts toward meeting membership requirements and harmonization.
Significance of the Study
This study investigates an evolution in educational standards in a particular profession: accounting. Just as a nation's adoption of IFRS produces financial statements that are accepted globally, harmonized education standards for professional accountants produces professional accountants that may practice globally. Global education standards and reciprocity among nations in the profession foster cultural and economic integration, and may advance and support sustainable business and professional infrastructures in developing economies.In light of the progress toward the usage of IFRS around the world and significant harmonization activities by IFAC, it is timely to examine the extent of IFAC's membership around the globe.
Sustainable global business environments rely on strong economic and financial infrastructure. This infrastructure must be supported by professionals who are held to high standards. Recently, International Education Standards (IESs) of the International Accounting Education Standards Board (IAESB) have been developed as benchmarks that members of IFAC must aspire to in the areas of prequalification education, professional skills and knowledge, professional values and ethics, practical experience, assessment of competence, and continuing education. Levels of adoption of standards in these areas were measured in the previous study (Hall & Sen, 2004) and will be re-examined in the current study. …