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Acknowledgments The Accountancy Education Benchmarking Study and ►► University of Tirana, Faculty of Economics its related methodology was developed by a team ►► Institute of Authorized Chartered Auditors of from the World Bank’s Centre for Financial Reporting Albania (IEKA) Reform (CFRR), led by Kalina Shukarova Savovska, Senior Financial Management Specialist and including ►► University of Sarajevo, School of Economics and consultants, Ana Cristina Hirata Barros, Atanasko Business Sarajevo (SEBS) Atanasovski, Jael Billy, Joelle Le Vourc’h, Ian Ritchie, ►► University of Banja Luka, Faculty of Economics Lejla Begtasevic Rudalija and Ranjan Ganguli. Editorial ►► Association of Accountants and Auditors of Republic assistance was provided by Denise Brettschneider Srpska (AAARS) and Ecaterina Gusarova. The study was supervised by both Jarett Decker, Head, CFRR and Henri Fortin, ►► University of Pristina, Faculty of Economics Global Lead for Corporate Governance and Financial ►► Society of Certified Accountants and Auditors of Reporting, World Bank. The team would like to thank Kosovo (SCAAK) Branislav Vukosavljevic, Arber Hoti, Hysen Cela and Lulzim Zeka for their extended support and inputs. ►► Ss Cyril and Methodius University in Skopje, Faculty of Economics - Skopje The team also wishes to thank Greg Owens, Member, ►► Institute of Certified Auditors of the Republic of International Accounting Education Standards Board™ Macedonia (ICARM) (IAESB)™, David McPeak, Principal, IAESB, Alfred Borgonovo, Senior Financial Management Specialist, ►► University of Montenegro, Faculty of Economics CFRR, and Nina Arnhold, Senior Education Specialist, ►► Institute of Certified Accountants of Montenegro World Bank, for their comments. Special thanks is (ICAM) extended to the expert teams of the IAESB and the International Federation of Accountants® (IFAC®) for ►► University of Belgrade, Faculty of Economics their guidance provided during the development of the ►► Serbian Association of Accountants and Auditors supporting methodology. (SAAA) Members of the Education Community of Practice ►► Serbian Chamber of Authorized Auditors (CAA) (EduCop) of the Road to Europe: Program of Accounting Reform and Institutional Strengthening (EU-REPARIS) We are grateful for the generous financial support provided a platform for the exchange of ideas provided by the European Union for the EU-REPARIS and information through several workshops and program. discussions. The team is very grateful to the following participating universities and Professional Accountancy Organizations (PAOs) for their time and quality of the information provided (listed in country order): Contents Acronyms 3 Executive Summary 5 Introduction 11 About the Study 12 Methodology and Approach 15 Cross-Cutting Issues 18 Good Practices 21 Albania 25 University of Tirana, Faculty of Economics 27 The Institute of Authorized Chartered Auditors of Albania (IEKA) 36 Bosnia and Herzegovina 45 University of Sarajevo, School of Economics and Business Sarajevo (SEBS) 48 University of Banja Luka, Faculty of Economics 59 The Association of Accountants and Auditors of Republic Srpska (AAARS) 67 Kosovo 75 University of Pristina, Faculty of Economics 77 The Society of Certified Accountants and Auditors of Kosovo (SCAAK) 85 1 Macedonia FYR 97 Ss Cyril and Methodius University in Skopje, Faculty of Economics-Skopje 99 Institute of Certified Auditors of the Republic of Macedonia (ICARM) 108 Montenegro 119 University of Montenegro, Faculty of Economics 121 Institute of Certified Accountants of Montenegro (ICAM) 128 Serbia 137 University of Belgrade, Faculty of Economics 140 Serbian Association of Accountants and Auditors (SAAA) 148 Chamber of Authorized Auditors (CAA) 157 About the CFRR 163 2 Acronyms AAARS Association of Accountants and Auditors of Republic Srpska AACSB Association to Advance Collegiate Schools of Business ACCA Association of Chartered Certified Accountants CA Certified Accountant CAA Chamber of Authorized Auditors CAT Certified Accounting Technician CFRR Centre for Financial Reporting Reform CIPFA Chartered Institute of Public Finance and Accountancy CPA Certified Public Accountant CPD Continuing Professional Development DBA Doctor of Business Administration ECTS European Credit Transfer System EduCoP Education Community of Practice EHEA European Higher Education Area EPAS Education Policy and Accreditation Standards EFMD European Foundation for Management Development EU European Union EU-REPARIS The Road to Europe: Program of Accounting Reform and Institutional Strengthening EQAR European Quality Assurance Register for Higher Education FBH Federation of Bosnia and Herzegovina FEE Federation of European Accountants IAASB® International Auditing and Assurance Standards Board® IAESB™ International Accounting Education Standards Board™ IAS® International Accounting Standards® 3 IASB® International Accounting Standards Board® ICAM Institute of Certified Accountants of Montenegro ICARM Institute of Certified Auditors of the Republic of Macedonia IEKA Institute of Authorized Chartered Auditors of Albania IES™ International Education Standard™ IESBA® International Ethics Standards Board for Accountants® IFAC® International Federation of Accountants® IFRS® Standards International Financial Reporting Standards IFRS for SMEs® Standard International Financial Reporting Standards for Small and Medium-Sized Entities IPD Initial Professional Development IPSAS® International Public Sector Accounting Standards® ISA® International Standards on Auditing® ISQC® International Standard on Quality Control® KFRC Kosovo Financial Reporting Council MBA Master of Business Administration MSc Master of Science PAO Professional Accountancy Organization PM Professional Master ROSC A&A Report on the Observance of Standards and Codes – Accounting and Auditing RS Republic of Srpska SAAA Serbian Association of Accountants and Auditors SCAAK Society of Certified Accountants and Auditors of Kosovo SEBS School of Economics and Business Sarajevo SEE Southeast Europe SMP Small- and Medium-Sized Practices SRRF-FBH Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina 4 Executive Summary Sound accountancy education systems improve the competence of professional accountants and contribute to enhanced public trust and confidence in the quality of their work. Fostering inclusive and sustainable economic growth is key to ending poverty and boosting shared prosperity. Growing economies create jobs, generate income, produce social benefits and attract investment. This is of particular importance for developing economies whose strategic development goals include significant efforts to improve the business climate, increase access to finance, strengthen the financial sector, and promote private sector-led growth. There is widespread recognition that in order for markets to function efficiently and for economies to grow, reliable and credible financial information is vital. Producing high quality financial information is supported by sound accountancy education systems that develop and improve the competence of professional accountants. This Accountancy Education Benchmarking Study was undertaken for, and at the request of, the Education Community of Practice (EduCop),1 with four key objectives in mind: ►► Sharing good practices of universities and Professional Accountancy Organizations (PAOs) and developing solutions to shared challenges through a collaborative process, which the EduCoP has facilitated by enabling members to engage in peer learning and regional knowledge exchange; ►► Exploring synergies between academic and professional accountancy education as a prerequisite for developing adequate accountancy education systems and ensuring the effective use of country level education resources; ►► Implementing a “learning outcomes approach” in accountancy education promulgated by the revised content based International Education Standards™ (IESs™)2 and international good practices as a more effective learning experience; and ►► Enabling a diagnostic that aims to assist EduCop members to engage in a process of international recognition and accreditation of national programs. Six countries participated in the study between March 2015 and May 2016: Albania, Bosnia and Herzegovina, Kosovo, Macedonia FYR, Montenegro and Serbia. The Study was a comprehensive assessment of the countries’ 14 universities and PAOs, which together provide 25 academic and professional accountancy education programs to around 4,120 enrolled students. Curricula content, learning outcomes and proficiency levels from these accountancy programs were analyzed using International Education Standards (IESs) related to technical competence (IES 2) and professional values, ethics and attitudes (IES 4) as the main benchmark. Supplementary benchmarking was performed for the purposes of comparing syllabi and course content with those of the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Public Finance and Accountancy (CIPFA). The Study identified a number of opportunities that can be explored in future accountancy education reforms. These opportunities represent significant areas that can have an important impact while developing accountancy education in the region and can lead to: ►► ecognition of the benefits of qualifications, certification and licensure processes by providing greater consistency R in the delivery of high-quality, industry or sector-specific services by individuals to the public; 1 Refer to the Introduction for a description of the EU-REPARIS program and the Education Community of Practice (EduCop). 2 Content based International Education Standards (IES) include: IES 2, Initial Professional Development – Technical Competences (2015); IES 3, Initial Professional Development – Professional Skills (2015); IES 4, Initial Professional Development – Professional Values, Ethics, and Attitudes (2015); and IES 8, Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (2016). 5 ►► Improving the reputation of the education program providers and enhancing the professional growth of individuals; and ►► Instilling a higher degree of accountability for accountancy education program providers and for individuals in developing and maintaining their competence. The Study also proposes a few practical tips which, when combined with the good practices identified, can help accountancy education providers to seize the key opportunities and implement reforms. Opportunity # 1 Integrate academic and professional accountancy education Findings The Study found that despite similarities in the curricula content and learning outcomes, the level of integration between academic and professional accountancy education programs was low in most countries. This presents an opportunity for closer cooperation between universities and PAOs, and could result in developing education programs with reduced overlap and duplication. In addition, this could lead to tailored curricula with scaled progressions of learning outcomes and proficiencies, with the more advanced learning outcomes introduced during professional education programs. A common competency framework to underpin academic and professional education policy would provide universities with the opportunity to incorporate tailored learning outcomes into degree programs to enable students to transition smoothly to a professional qualification program. Thus, curricula would be mapped to competencies, learning outcomes would be mapped to proficiency levels, and the gap between professional bodies and academic programs on exemptions and recognition policies would be bridged. In some cases, delivering joint programs can also be beneficial and lead to greater efficiency in utilizing scarce country-level educational resources. In shaping the common competency and policy framework, it would be important to consult with private- and public-sector employers to mitigate the risk of disconnect between skills taught and skills required. In addition, it would help to address the poor post-degree employment rates experienced in some of the countries surveyed. Tips & Ideas ►► Develop a common policy and competency framework to underpin academic and professional education programs; ►► Understand gaps between academic and professional streams (e.g. by mapping competencies and learning outcomes to proficiency levels); ►► Develop a system of mutual exemptions and recognition between the academic and professional streams; ►► Partner with leading education providers to use up to date and high quality teaching materials and resources; and ►► Engage with private sector employers to understand required skills and incorporate them into education programs and competence frameworks. 6 Opportunity # 2 Achieve greater international integration of programs Findings In the academic context, nationally accredited programs enjoy recognition in other countries of the European Higher Education Area (EHEA) – for example, master’s graduates receive automatic recognition to participate to a Doctoral program in another country of the EHEA. By contrast, national professional accountancy programs in participating countries have limited recognition abroad. Most of the education programs are focused on the local market with little regional or international integration. Most of the university programs are accredited at the national level only. Only one of the participating universities has attempted to apply for accreditation from an internationally-recognized accreditation organization. Many of the professional education programs that were surveyed offered an ACCA-based program but despite similarities, few exemptions with ACCA foundation papers are possible and a system for blanket recognition of exams is not always in place. This is disadvantageous for students who might want to apply for membership of an international PAO. As professional qualifications become internationally marketable, they become more appealing to potential applicants and attract new talent to the profession. In addition, international recognition adds to the quality of the education programs as there is an aspiration to achieve higher standards of education that are recognized by institutions abroad. Tips & Ideas ►► Universities may pursue international accreditation as part of a strategy to expand and raise their profiles; ►► Universities can engage in twinning and joint programs with recognized EU-based universities; ►► artner and twin with international PAOs to enable knowledge sharing and achieve better international P integration; and ►► E ngage with international PAOs to introduce a more structured system of mutual recognition and exemptions offering candidates a faster route to international membership. Opportunity #3 Expand the offerings of public sector education Findings There is potential for university programs at all levels to cover public sector topics, including International Public Sector Accounting Standards® (IPSAS®). Given that up to 25 percent of graduates ultimately find employment in the public sector, the introduction of more public sector courses would help align university programs with their graduates’ needs and may help to improve the quality of public sector financial accounting and reporting. Similarly, given that a sizable number of PAOs members work in the public sector, PAOs might want to consider introducing specialized public sector certification programs as well as tailored public sector Continuing Professional Development (CPD). An important step for PAOs in providing direction would be to gather case studies on how 7 partnerships and alliances have been formed, and how obstacles can be overcome with organizations such as CIPFA. For example, PAOs could work with public sector authorities, supreme audit authorities and other relevant stakeholders to identify the content for such CPD programs and training. The Study identified a few PAOs which had already expanded their offerings to public sector education, including developing public sector qualifications and introducing tailored CPD on public sector financial reporting. Tips & Ideas ►► Introduce CPD training tailored for accountants in the public sector; ►► Work with government employers to help identify the content and scope of new qualifications and CPD programs; ►► Develop public sector certification programs. A possible cost effective approach could be to develop a set of public sector papers on top of the core accountancy qualification; and ►► University programs to include a greater focus on public sector accounting and reporting including IPSAS. Opportunity # 4 Enhance CPD systems and training programs Findings Public confidence and trust in the profession is linked to the quality of the professional services they provide. By engaging in continuing professional development activities, professional accountants maintain and upgrade their skills so the quality of their work can remain at high levels. Many of the CPD systems lack flexibility and access to suitable CPD opportunities can be difficult. Limited numbers of in-country CPD providers (usually a single PAO in each country), limited range of admissible CPD units (usually classroom training organized only a few times per year) and a lack of tailored CPD offerings for members working in specialist business segments and sectors of the economy are some of the constraints in the present CPD systems. Further, CPD is specified and measured in an input based approach (by completing a minimum number of training hours), rather than a learning-outcomes based approach (which requires participants to demonstrate mastery of professional competences linked to their specific roles and needs). Tips & Ideas The Study already identified a number of actions and good practices that can be further explored while enhancing CPD systems, including: ►► Periodically assessing competences developed through CPD; ►► Resolving capacity constraints by outsourcing CPD delivery to international network accounting firms and international experts; and ►► Introducing minimum ethics content in annual CPD training. 8 Other actions that universities and PAOs can implement to improve the CPD systems and training programs include the following: ►► Introduce a variety of options for CPD activities and modern methods of delivery (e.g. online platforms); ►► Develop more frequent and focused CPD training offerings, including activities to develop professional skills, as well as professional values, ethics and attitudes; ►► Introduce an accreditation system of CPD providers; ►► Prescribe learning outcomes for CPD activity and introduce output-based measurement systems; ►► Introduce personal reflections as part of periodic CPD evaluations as a means to gradually move towards a more learner-centered CPD approach; and ►► Engage with the International Accounting Standards Board® (IASB®) and the International Federation of Accountants® (IFAC®) to make available the latest versions of International Standards on Auditing® (ISA®) and International Financial Reporting Standards® (IFRS® Standards) to practitioners. Opportunity # 5 Improve practical experience requirements and workplace assessments Findings Universities can improve their approach to teaching theory and develop more internship opportunities to create links between students and the job market. PAOs could introduce formal learning outcomes for professional skills, and professional values, ethics and attitudes, to close the compliance gaps with IESs. PAOs could also consider moving away from systems of measuring practical experience based on the amount of time served to developing evidence-based methods, such as verifying the skills and competences obtained in practical training through workplace assessments. Tips & Ideas The Study found a number of good practices already in place that can be referred to as good examples how to establish links with the business world, including: ►► Involving practitioners in the delivery of more practical lectures; ►► Using work log books to assess the quality of work experiences; ►► Creating a network of internship opportunities and making internships a minimum requirement for graduation; and ►► Providing employment databases to help with post-qualification opportunities. Other actions that universities and PAOs can implement to improve the teaching of theory and enhance the practical experience requirements, are listed below: ►► Introduce learning outcomes for professional skills, and professional values, ethics and attitudes, subject to workplace assessments; 9 ►► PAOs could provide tools and guidance to candidates and supervisors for development of practical skills, such as competency maps and frameworks to help identify areas of focus and further skills development; ►► Create a database of supervisors to help mentor candidates; ►► Receive feedback from employers and business support organizations to ensure that skills-gaps are being identified and addressed through education and qualifications; ►► Stress-test competency maps with potential employers; and ►► Maximize opportunities for exercising professional judgment in academic programs (e.g. through the use of business simulation activities, introducing practitioners into the teaching process, etc.). 10 Introduction Fostering inclusive and sustainable economic growth is Accountancy Education key to ending poverty and boosting shared prosperity. Growing economies create jobs, generate income, produce social benefits and attract investment. This is of particular importance to developing economies whose strategic development goals include significant efforts to improve the business climate, increase access to finance, strengthen the financial sector, and promote private sector-led growth. There is widespread recognition that in order for markets to function efficiently and for economies to grow, reliable and credible financial information is vital. Producing high quality financial information is supported by sound accountancy education systems that develop and improve the competence of professional accountants. Well-developed accountancy education programs comprise technical competencies, professional skills, and professional values, ethics and attitudes. Initial education includes all the training that aspiring accountants need to complete in order to begin their career: general education (e.g. high school, university), includes learning and development undertaken to initial professional accountancy education (usually maintain technical competencies, professional skills, delivered through PAOs), completion of practical and professional values, ethics and attitudes over the experience (to learn on-the-job skills under the course of a career. These education programs are tutelage of a skilled accountant or auditor), and finally, essential, not only for ensuring the competencies of passing a formal assessment of the requisite technical professional accountants, but also to strengthen public competencies, professional skills, and professional trust and confidence in their work. values, ethics and attitudes. Continuing education The EU-REPARIS Education Community of Practice The Road to Europe: Program of Accounting Reform and Institutional Strengthening (EU-REPARIS) has been designed to help and encourage the process of integration of candidate or potential candidate countries for EU enlargement in the countries of Southeast Europe, including Albania, Bosnia and Herzegovina, Kosovo, Macedonia FYR, Montenegro and Serbia. The Education and Development activity of EU-REPARIS aims to promote the development of accountancy education aligned with International Education Standards (IESs) and the educational requirements of the EU’s Statutory Audit Directive for professional qualifications, continuing professional development, and at university level. The Education Community of Practice (EduCoP) was established as a means of achieving this objective. There is a substantial commonality of curriculum content, qualification systems, and lifelong learning requirements that are being addressed on a regional basis through the EduCop. 11 About the Study This publication records findings from the World Bank Centre for Financial Reporting Reform (CFRR) Accountancy Education Benchmarking Study, which was undertaken as part of the EU-REPARIS Program and its Education Community of Practice (EduCop). 25 4,120 Educational Students 6 Programs 14 Countries Universities in SEE and PAOs Participant Profile programs were assessed between March 2015 and October 2015, and curricula were benchmarked with Between March 2015 and May 2016, six countries took the cutoff date for the academic year 2014/2015. The part in the Study: Albania, Bosnia and Herzegovina, PAO assessment took place between January 2015 and Kosovo, Macedonia FYR, Montenegro and Serbia. May 2016 and included an analysis of 11 professional The Study was a comprehensive assessment of programs and benchmarked curricula, with December accountancy education in the region at both academic 2015 as the cutoff date. and professional levels, with a high level of participation from stakeholders. The Study analyzed 14 universities and PAOs providing Objectives of the Study 25 academic and professional educational programs. The Accountancy Education Benchmarking Study was Curricula content, learning outcomes and proficiency undertaken with four key objectives in mind. levels from the accountancy programs were analyzed using International Education Standards (IESs) related to technical competence (IES 2) and professional values, ethics and attitudes (IES 4) as the main benchmark. The sample included some of the largest accountancy education providers in the participating countries 1 Engaging in peer learning whose programs are widely recognized and in high and regional knowledge demand, and which collectively offer accountancy exchange education to approximately 4,120 enrolled students. The university benchmarking methodology was piloted in late 2014 and the approach was tested in The Study reflects the EduCop’s work under EU- one university. Following the pilot, the 14 academic REPARIS. The EduCoP provides its members with 12 the opportunity to discuss, share experiences and comparing the content of the accounting syllabus collaborate on curriculum content, qualification offered at selected universities and PAOs against systems, and lifelong learning requirements. This Study the IESs related to technical competence (IES 2), and catalogs members’ good practices with a view to their professional values, ethics and attitudes (IES 4). It can replication elsewhere in the region. It also highlights also be viewed as a gap analysis tool and roadmap to potential opportunities for future accountancy guide member bodies of the International Federation education reforms and proposes tips and ideas on how of Accountants (IFAC) to engage in an education they can be achieved. conversion process that embraces a learning outcomes approach. 2 Exploring synergies between 4 Assisting with international academic and professional recognition and accountancy education accreditation of national accountancy programs Accountancy education is multilayered. It starts with universities whose focus is to align university Participating universities and PAOs hail from countries curricula with the needs of industry and the profession. of Southeastern Europe that are engaged in the Understanding the need to align and integrate European Union (EU) enlargement process as either university accountancy programs with professional candidate or potential candidate countries. The Study education programs is a prerequisite for developing is a diagnostic tool which compares learning objectives sound accountancy education systems and ensuring of an accountancy program to a set of international the effective use of resources. benchmarks. It could enable the development of documentation to support an application for accreditation abroad and support recognition with EU- based universities and international PAOs. 3 Implementing a learning Benefits for Stakeholders outcomes-based approach in There are a number of benefits for all stakeholders accountancy education participating in this Accountancy Education Benchmarking Study including: International good practice in accountancy education focuses on a “learning outcomes approach” when Students’ perspective developing Initial Professional Development (IPD) •• Enables visibility of entire syllabus coverage by and CPD programs, and identifying professional learning outcomes; competences to be gained through practical experience. The International Accounting Education •• Assists decision-making during course selection (e.g. core vs. elective, undergraduate vs. master’s Standards Board™ (IAESB™), which is responsible for program); and promulgating the IESs, has emphasized that learning and development experiences are highly effective •• Increased awareness of skills and knowledge if they are based on individuals’ demonstrated required; next generation of students receive more achievement of learning outcomes at a targeted level focused education. of proficiency, rather than focusing on the learning process itself. This Study provides a baseline by 13 University perspective •• Highlights areas for improvement such as the need Learning outcomes are at for curricula reforms where applicable; •• Provides international comparability of programs the core of the revised IESs and evidence to support an application for The International Accounting Education Standards Board accreditation; (IAESB), as an independent standard-setting body of •• loses gaps between academia and professional C IFAC, serves the public interest by strengthening the education by facilitating better linkage with PAOs world-wide accountancy profession by developing (e.g. opportunities for exemptions); and and implementing globally accepted IESs, aimed at increasing the competence of the global accountancy •• Tool to influence policymakers. profession and reducing international differences in the requirements to qualify and work as a professional Employers’ perspective accountant. •• Better skills and work readiness of the next The IAESB recently revised the IESs. Most of the generation of accountants; revised standards came into effect from July 1, 2015, except for IES 8 which became effective on July 1, •• Improved recruitment base leads to easier 2016. At the core of these revisions is a shift towards recruitment process and reduced human resources a “learning outcomes” approach for the content based costs (e.g. training costs); and IESs as an effective way to develop competences. This •• Employees acquire international proficiency in educational approach involves the active participation accounting. of students by asking them to demonstrate the achievement of a learning outcome at a targeted level of proficiency (either foundation, intermediate PAOs’ perspective or advanced). •• Self-diagnostic tool that shows to what extent The IAESB has highlighted many benefits in adopting a the learning outcomes of a program compare with learning outcomes approach to accountancy education. international benchmarks; These include: •• Gap analysis tool and conversion tool toward the ►► Enhancing an individual’s competence, given the learning outcomes approach required by IES 2 and direct link between education and on-the-job IES 4; capability; •• Closes gaps between academia and professional ►► Adding accountability for program design by bodies, and enables better linkage with universities; introducing a statement of what a particular •• Provides international comparability and evidence to curriculum is expected to achieve; support applications for recognition of qualifications; ►► Increasing visibility of the program to students; and and ►► Identifying portions of the program which need •• Self-promotion tool used to attract new members development. to the profession. The IAESB has produced guidance material to support the implementation of a learning Policymakers’ perspective outcomes approach which can be accessed at •• Overview of the education system at the country www.ifac.org/publications-resources. Transitioning level; to a learning outcomes-based approach requires IFAC member bodies to engage in an education conversion •• Tool to support effective education resource process that starts by mapping existing education allocation decisions; and programs to learning outcomes and devising a plan to •• Resource for National Accreditation Bodies when address the gaps. assessing new accountancy programs. 14 Next Steps as development partners) with a view to building consensus on and facilitate in-county accountancy This Study has been reviewed by participating education reforms. Countries will be encouraged to universities and PAOs of the EU-REPARIS EduCop prior repeat periodic self-assessments using this Study’s to publication. Thereafter, the Study will be used methodology to observe differences with this baseline primarily to facilitate in-country discussions with a assessment and to assess the impact of reform broad range of stakeholders (including policymakers, measures. The EU-REPARIS EduCop will continue to academia, the profession, regulators, private and meet on a regional basis to enable countries to share public sector employers, business community, as well reform strategies and measures. Methodology and Approach Data from participating countries were gathered post-graduate career paths. For PAOs, data collected through questionnaires tailored for university and included: types of qualification offered (e.g. accounting professional accountancy education programs. A technician, chartered accountant, etc.); number of diagnostic tool was developed to map the curricula aspiring members; gender profile; sources of funding; content, learning outcomes and proficiency levels of links with universities or other PAOs (national, the accountancy programs and compare them against regional and international); and continuing professional internationally-recognized benchmarks. The learning development. outcomes and competence areas were validated by The Study also draws on the principles of other IESs to inspecting the source syllabus content and syllabus provide a high level analysis of the accounting programs details for each of the accountancy programs subject in areas such as practical experience, professional to the assessment. skills, assessment of technical and professional IESs related to technical competence (IES 2) and competence, and the quality of continuing professional professional values, ethics and attitudes (IES 4) were development for members of PAOs. A summary of the the main benchmarks. Other benchmarks included IESs is presented below. the curricula for the professional qualification of the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Public Finance IES 1, Entry Requirements and Accountancy (CIPFA). The ACCA program was to Professional Accounting selected as it is a globally-recognized qualification which is already broadly recognized and utilized in Education Programs (2014) the participating countries and has existing links to This IES establishes the principles to be followed when academic accountancy programs. The CIPFA program setting and communicating educational requirements was used as the principal benchmark for public sector for entry to professional accountancy education accounting education given its widely acknowledged programs. Such programs should have suitable entry international recognition. Finally, the requirements requirements which are neither too high by posing of the EU acquis communautaire as issued in the unnecessary barriers to entry, nor too low. Candidates directives for accounting and auditing, which largely should have a reasonable chance of successfully align with IESs as well as the learning outcomes laid completing the program. For example, some programs down in both the National Qualification Frameworks require completion of a degree from a university or and the European Qualifications Framework of Lifelong equivalent higher education institution. Learning, were also considered at a high level. Data were collected to give context to the broader accountancy education environment in the participating IES 2, Initial Professional countries. For universities, such data included: Development – Technical admission criteria (number of students enrolled Competence (2015) in the university and in accountancy programs at undergraduate and master’s levels); gender profile; This standard prescribes the learning outcomes for number of professors and other teaching staff; length the technical competences that aspiring professional of tenure and qualifications; sources of funding; and accountants should be able to demonstrate on completion of the program, which is often referred 15 to as IPD. These competence areas include essential accountancy knowledge (such as financial accounting and reporting) and other business disciplines (e.g. business strategy and management). Measurement Approaches IES 3, Initial Professional There are three measurement approaches that PAOs Development – Professional Skills can use to monitor the achievement of practical experience and CPD: (i) input-based; (ii) output-based; (2015) or (iii) a combination of output-based and input-based Another key element of IPD is the professional skills approaches. required to demonstrate competence as a professional An input-based approach focuses on what the learning accountant. These include achieving the requisite or development activity should feature, e.g. coverage learning outcomes for intellectual, interpersonal and of certain subject matter in curricula or the minimum communication, personal and organizational skills. For number of hours that a course should comprise. example, a learning outcome for intellectual skills is to For example, a requirement to complete a minimum recommend solutions to unstructured, multi-faceted of 120 hours of CPD over a three-year period is an problems. input-based requirement. Input-based approaches allow easier measurement and verification but also have the shortcoming that they do not focus on the IES 4, Initial Professional development of a specific competence. Development – Professional In an output-based approach, the focus is on Values, Ethics, and Attitudes whether a specific competence has been developed (2015) or maintained, as demonstrated by achieving certain learning outcomes. Learning outcomes This IES stipulates the professional values, ethics, and clearly express the competences that need to be attitudes that aspiring professional accountants are demonstrated for a particular subject. Under this expected to demonstrate. These include: learning approach, evidence of achievement can be taken outcomes associated with professional skepticism from workplace assessments validated by a suitably and professional judgment; ethical principles; and qualified supervisor, or undertaking a form of periodic commitment to the public interest. For example, a assessment of competence achieved through CPD. learning outcome of ethical principles is identifying ethical issues and determining which ethical principles to apply. IES 5, Initial Professional Development – Practical IES 6, Initial Professional Experience (2015) Development – Assessment of This standard establishes the practical workplace Professional Competence (2015) experience that aspiring professional accountants As a prerequisite of completing IPD, this standard should achieve during IPD under the supervision of establishes the requirement for assessing the appropriately qualified providers. This experience professional competence of aspiring professional should reinforce the technical competence and other accountants. The assessment should be based on professional skills that candidates are expected to verifiable evidence with high levels of reliability, achieve. PAOs may adopt an input-based, output-based validity, equity, transparency, sufficiency and may or combination approach to measure the achievement include a series of examinations, a single multi- of practical experience requirements. If an input-based disciplinary examination, or a series of examinations approach is used, the practical experience requirement and workplace assessments conducted throughout IPD. should be for a minimum of three years. 16 IES 7, Continuing Professional Development (2014) After completing IPD, professional accountants are expected to develop and maintain their level of professional competence through a CPD program. This Principles of Assessment can be achieved by following an input-based, output- IES 6 requires PAOs to establish appropriate based or combination approach. assessment activities designed to enable the combined achievement of several attributes, including IES 8, Professional Competence high levels of: for Engagement Partners ►► Reliability – the assessment activity should consistently produce the same result, given Responsible for Audits of the same set of circumstances (e.g. avoiding Financial Statements (2016) using ambiguous wording in written examination questions); Professional accountants performing the role of Engagement Partners (referred to in some jurisdictions ►► Validity – assessments should measure what as the “signing partner” or “statutory auditor”) are they were intended to measure (e.g. using expected to maintain and develop the professional comprehensive case studies rather than simple competence to function in this particular role. This IES case studies); establishes the learning outcomes for engagement ►► Equity – the assessment activity should be fair and partners. For example, a learning outcome for audits without bias (e.g. introducing assessment activities is to develop an appropriate audit opinion and related that rely on computer-based technologies); audit report, including a description of key audit matters, as applicable. ►► Transparency – enabling appropriate public access regarding the assessment activities (e.g. making information on scoring, types of assessments Interpreting the Benchmarking publicly available); Results ►► Sufficiency – whether the assessment activity has a balance of depth and breadth, knowledge, and When interpreting the benchmarking results, readers application, and combines materials from different should consider the following: areas applied to a range of situations and contexts •• The learning outcomes and proficiency levels (e.g. assessment activities that combine technical prescribed by IESs provide a base that education knowledge and professional skills, and professional providers can further build upon to reflect specific values, ethics and attitudes, at appropriate levels competencies needed for a particular role. of difficulty and detail). Education providers can increase the proficiency levels and add more learning outcomes to the ones prescribed, but are not allowed to lower the level of proficiencies or remove learning outcomes. Consequently, the number of learning outcomes benchmarked by IES 2 and IES 4 is less than the •• Achieving 100 percent of one competence area may learning outcomes benchmarked under the ACCA involve many more learning outcomes compared and CIPFA qualifications. to another one (for example, in IES 2 there are six learning outcomes relating to the Financial •• The 100 percent level of the benchmark boxes Accounting and Reporting competence area, presented in the country profiles of this Study compared to three in the Information Technology represent the actual level of content in each of the competence area). qualifications or competency maps; and 17 Cross-Cutting Issues Accountancy education approaches differ in each country and generalizing the findings can be challenging. During the Study, some cross-cutting issues were identified that are discussed in more detail below. Sources of Funding Reliance on public funds is quite high in many participating universities (e.g. Albania, Bosnia – Republic Srpska and Kosovo). The other universities have gradually reduced this dependence, which is consistent with broader trends in the EU. A more proactive approach in seeking private funding may be warranted to diversify the funding mix and support improvements in the quality and outreach of programs. Qualification programs are not a significant source of income for most of the participating PAOs, with the exception of Kosovo. Overreliance on certain sources of income (e.g. membership fees in the case of Albania, Macedonia FYR and Serbia, or fees from PAO magazines in the case of Montenegro) should be analyzed, and strategies devised to diversify the funding sources. Major Funding Source Universities Profession Albania 90% Albania 73% Bosnia [FBH] 52% Bosnia [RS] 43% Bosnia [RS] 60% Kosovo 70% Kosovo 70% Macedonia FYR 45% Macedonia FYR 74% Montenegro 49% Montenegro 74% Serbia [SAAA] 56% Serbia 53% Serbia [CAA] 65% Membership fees CPD programs Government Qualification Publications and Student fees programs Conferences Resources and Capacity Teaching staff at participating universities are well qualified. However, in some countries (e.g. Macedonia FYR) the teacher to student ratios are high and a comparatively high number of teaching hours are required of professors. Further, salaries paid to professors are not always sufficient to retain and attract new faculty members. Most PAOs are modestly resourced, as indicated by the relatively low available annual budget per member. As a consequence, PAO executive offices employ relatively few permanent staff. Education functions are often outsourced or rely on part-time consultants. 18 Demand and General Trends Between 10 percent (Kosovo) and 38 percent (Albania) of students choose programs with an accounting content. The demand for accountancy education has been increasing in most countries and has been stable in the others. Business and the financial sector are the major employers for university accounting and audit graduates. The accountancy profession employs between 15 and 25 percent of graduates, while governmental and the not-for-profit sector employ between 10 and 25 percent of overall accountancy graduates. In most of the countries surveyed, PAOs have reported an increased demand for accountancy qualifications. Gender Profile In most participating universities, the number of female accounting students exceeds that of male students. At the professional level, with the exception of Kosovo, Macedonia FYR and Bosnia, Republic Srpska (RS), the gender profile of members is relatively balanced between men and women. PAOs’ managing boards are dominated by males so a greater proportion of female accounting professionals should be encouraged in the PAOs’ governance structures. Universities Profession Albania 80% Albania 55% Bosnia [FBH] 77% Bosnia [RS] 75% Bosnia [RS] 58% Kosovo 63% Kosovo 60% Macedonia FYR 63% Macedonia FYR 73% Montenegro 52% Montenegro 80% Serbia [SAAA] 60% Serbia 79% Serbia [CAA] 53% International Recognition and Accreditations All countries, except for Kosovo, are members of the European Higher Education Area (EHEA) and have declared their willingness to pursue and implement the objectives of the Bologna Process in their systems of higher education. The Bologna Process is a series of ministerial meetings and agreements that promotes the following action lines: compatible qualification frameworks, international mobility of students and staff, European cooperation in quality assurance of higher education, employability of students, cross border joint programs, recognition of qualifications, equal opportunities in higher education, and lifelong learning. The main impact of the Bologna process for the countries participating in this Study has been to ensure program comparability and facilitate student mobility between countries. The National Qualifications Frameworks in the countries covered by the Study do not prescribe detailed learning outcomes as laid down in European National Qualification Frameworks and the European Qualifications Framework of Lifelong Learning. 19 Higher level education programs are accredited at the national level by country national accreditation bodies or agencies which follow the principles of the Bologna process and provide accreditation for academic programs. Serbia and Kosovo have agencies which are full members of the European Quality Assurance Register for Higher Education (EQAR). However, higher education institutions in these countries are not allowed to turn to other EQAR registered agencies for external quality assurance. Although higher education institutions in Albania can choose an EQAR agency, their report will serve an informative purpose for the Ministry of Education, which bases the decision on recommendations from the National Accreditation Agency. In summary, the countries’ academic education programs can only be offered if they are accredited by the national accreditation bodies or agencies. With regard to the accreditation of university programs within EHEA or internationally, there have been very few attempts. Professional bodies also have limited recognition of their programs abroad. There have been some attempts to enter into Memoranda of Understanding with recognized professional bodies abroad that enable a fast-track route to membership but these attempts are few. Curricula Benchmarking The curricula benchmarking provided some high level results that can be broadly summarized as follows: •• University programs, and especially Master’s programs, show a greater alignment with IES learning outcomes than do PAOs’ professional programs. •• Both university and PAOs’ professional programs could benefit from improving the learning outcomes concerning ethics and commitment to public interest. •• Scaled progressions of learning outcomes and proficiency levels between undergraduate programs and PAOs’ professional education are not always in place. •• International Public Sector Accounting Standards (IPSAS) and accrual accounting applied in the public sector are not sufficiently covered. •• There is quite a weak level of integration between academic and professional accountancy education programs, despite the many similarities in curricula content and learning outcomes. The Study observed lack of consistency in terms of regular updating of course content. In some instances, there had been minor annual updates while in others there had not been a major update for long periods of time, sometimes almost decades. Given significant changes in IFRS Standards and International Standards on Auditing (ISA) over the last decade, there is a need for a more structured syllabus updates, ideally every three to five years, with minor conforming amendments made to syllabus content on an annual basis in order to take into account tax and regulation updates. Professional Ethics, Values and Attitudes There is a lack of content consistency surrounding professional ethics, values and attitudes. In some cases, ethics had been integrated across the curriculum. This approach allows both providers of education and recipients of ethics education to approach professional ethics as a skillset that is pervasive to the accountant’s day to day role, rather than as a skill used only in particular situations. In other cases, ethics was not covered at all progression levels of the certification program, which is not appropriate since ethical competence is required at every level of the profession. Further, in some places ethics was being offered as an elective course, which again is not appropriate given the public’s needs and expectations of the profession. Professional ethics, values and attitudes is an area that regulators are often concerned with and it is therefore quite important that accountancy education providers include ethics as part of their core syllabi. 20 Continuing Professional Development CPD programs and requirements are in place and there is good coverage of accounting and auditing topics within CPD programs. Going forward, PAOs face a number of challenges to further develop the CPD systems. These include: enhancing CPD courses by introducing more topics that cover soft skills; exploring more participative ways of teaching ethics; introducing some flexibility in access to CPD; modernizing CPD delivery methods (e.g. introducing online CPD platforms); and introducing output-based CPD measurement systems that focus on the achievement of learning outcomes. Good Practices A number of good practices by participating universities and PAOs were identified during the Study and are highlighted throughout the report in the country profiles. For universities, these practices can be broadly categorized under innovative learning and teaching practices, partnership opportunities and practical experience requirements. From a PAO perspective, these good practices relate to developing high quality professional qualifications, promoting lifelong learning through CPD, and providing relevant, value-added services to members. Universities Innovative learning and teaching practices GOOD PRACTICES SUMMARY ►► Maintaining low teacher-student ratios and process on an ongoing basis and introducing high student retention rates; improvements; ►► Achieving globally-recognized standards in ►► Monitoring performance and quality higher education and pursuing international through establishing key performance recognition and accreditation; indicators; ►► Establishing regular curricula review cycles; ►► Using IT tools to support the teaching process; and ►► Maintaining curricula and teaching processes that are up to date with the skills ►► Fostering an inclusive environment for and needs of employers and stakeholders; disabled students. ►► Assessing the quality of the teaching Partnership opportunities ►► Formalizing interactions with the business ►► Cooperating with PAOs to develop community by creating Business Advisory university curricula; Boards including representatives from ►► Introducing a system of exemptions successful companies, employers and other between university and professional stakeholders; education programs to enable a faster route ►► Participating in faculty members exchange for students aspiring for a professional programs with universities abroad; qualification; ►► Entering into partnerships to use and ►► Facilitating professional networking translate quality teaching materials and opportunities for students; textbooks; 21 ►► Supporting the student learning process by ►► Providing employers with access to student UNIVERSITIES developing business case competitions; databases as a tool for connecting job seekers and employers. ►► Assisting the talent recruitment process through partnerships with accounting firms; and Focus on practical experience ►► Introducing mandatory practical experience ►► Developing technical and professional and internship requirements; competencies through practical experience. ►► Engaging established practitioners as part- time lecturers on a continuing basis; and PAOs Quality of professional qualifications GOOD PRACTICES SUMMARY ►► Entering into agreements with leading ►► Introducing a system of independent providers of professional accounting and oversight to ensure the integrity of the auditing education to use and translate high professional examination; quality textbooks and study materials; ►► Implementing procedures to protect ►► Supplementing textbooks with practice kits, candidate anonymity during examinations; case studies, exercises and mock exams; ►► Introducing double marking systems; ►► Engaging international network firms to ►► Allowing candidates to inquire into the help PAOs update their education materials; marking of their paper and to file a ►► Providing tools and guidance to help meet complaint; practical experience requirements; ►► Transparency with pass marks that are ►► Providing guidance to supervisors who published on the PAO website; mentor candidates while acquiring the skills ►► Implementing security, timeliness and competencies required for a particular and quality control procedures during role; examination marking; ►► Involving various committees and ►► Integrating professional ethics across the stakeholders into the professional education curricula; and education program to ensure the adequate separation of roles and responsibilities; ►► Cooperating regionally and introducing mutual systems of qualification recognition. 22 Commitment to lifelong learning and high quality CPD PAOs ►► Periodically assessing competencies ►► Quality assurance review findings are developed through CPD; incorporated into the CPD annual program: identifying the target audience to receive ►► Monitoring members’ CPD records and specific or additional CPD and tailoring ensuring that they are relevant, accurate CPD annual sessions to areas where most and complete; findings are observed; ►► Activating disciplinary measures when CPD ►► Resolving PAOs capacity constraints by obligations are not met; outsourcing CPD delivery to accounting ►► Providing members with a good choice firms and experts; of accessible CPD in order to support ►► Informing members of their CPD obligations compliance with requirements; and providing CPD guidance to members; ►► Maintaining a CPD lecturers’ contact ►► Partnering with regional PAOs to deliver database comprising external experts and joint CPD sessions; and practitioners who specialize in different topics and fields, and relevant members of ►► Introducing minimum ethics content in academia; annual CPD training. Value-added member services and commitment to public interest ►► Developing tailored education offerings ►► Monitoring PAOs performance by following to meet the needs of the various roles of a set of Key Performance Indicators to professional accountants; improve performance and the quality of services offered to members; and ►► Promoting the importance of the public interest role of the accountancy profession; ►► Active engagement on public sector accounting issues. ►► Entering into twinning arrangements and partnerships with developed PAOs for specific support and broader experience and knowledge sharing; 23 24 Albania at a glance About IEKA: A professional organization of Certified Auditors and an IFAC member since 2008. Its mandate is formally recognized in Albanian Law. IEKA represents 220 Certified University of Tirana, Auditors, 57 audit firms and 142 sole Faculty of Economics practitioners. It is mainly funded through membership fees. The professional education and training The Faculty is heavily reliant on state funding program is defined by law and the Certifying for undergraduate programs and enjoys partial Authority plays a substantial administrative role autonomy in developing new programs and in during professional examinations. No substantial establishing international cooperation. Programs reviews to the program are performed as the are all accredited at the national level. requirements are fixed in the law. IEKA provides professional training to prepare candidates entering the profession and also supports Well-established accounting program with a the Certifying Authority in developing the long tradition, enriched with a solid practical examination papers. experience requirement. Professors have excellent connections to the local profession, The CPD requirement for Certified Auditors is but the program itself has few links to national prescribed by law and IEKA is currently the only and international professional bodies in terms of CPD provider. The training offering is tailored exemptions offered. to satisfy the needs of the IEKA membership and accordingly covers ISA, professional ethics, regulatory and tax updates. Areas Demand for accounting education has been for improvement include introducing learning steadily growing; undergraduate and master’s outcomes and more advanced topics for audit level accounting degrees are popular with partners. students. Benchmarking results: The professional program Faculty resources: Well-resourced accounting scores well in only a few areas including department with qualified senior professors financial reporting, auditing and assurance are factors which enable a good learning and professional ethics. Other areas compare environment. Low salaries create difficulties in poorly with benchmarks and many learning attracting new staff members. outcomes required by IES 2 and IES 4 are not covered. Very few learning outcomes with advanced proficiency are included in the Benchmarking results: master’s level programs qualified auditor program. compare well to ACCA and IES benchmarks. However, they compare poorly with the CIPFA benchmarks because of low coverage Institute of Authorized Chartered of IPSAS. Areas for improvement include Auditors of Albania (IEKA) introducing courses on auditing and assurance subjects at the undergraduate level as well as incorporating IT competencies and further emphasizing ethics. 25 Key survey facts 2 790 Respondents 3 Students Educational Programs Accountancy Education Framework in Albania Aspiring professional accountants in the Accounting Stream (Certified Accountant in Albania need to complete a qualification) enroll in the training programs offered university degree in business or by the professional bodies of accountants. economic studies and then a master’s degree in Upon completing a professional body’s training either accounting or auditing. program, the candidate needs to pass the Certifying The candidate is then eligible to enter a professional Authority’s statutory exams. The Certifying training program in either the Audit or Accounting Authority operates under the Ministry of Finance streams. Candidates in the Audit stream (Certified and comprises five members (representing the Auditor qualification) enroll in the training program Ministry of Finance, Ministry of Economy, National administered by Albania’s professional body of Accounting Council, IEKA and one representative auditors – the Institute of Authorized Chartered from the professional bodies of accountants) Auditors of Albania (IEKA) – while candidates nominated for a period of three years. Contacts Sotiraq Dhamo Julian Naqelleri Hysen Cela Elvira Hoxha University of Tirana, University of Tirana, President, Institute of Executive Director, Faculty of Economics, Faculty of Economics, Authorized Charted Institute of Authorized Department of Department of Accounting Auditors of Albania (IEKA) Charted Auditors of Accounting Albania (IEKA) dhamosp@yahoo.com jnaqellari@yahoo.com hysen.cela@ieka.al elvira.hoxha@ieka.al www.unitir.edu.al www.unitir.edu.al www.ieka.al www.ieka.al 26 University of Tirana, Faculty of Economics About the Faculty The Faculty relies heavily on public funding for its undergraduate programs but enjoys partial autonomy in developing new programs and in establishing international cooperation. Programs are all accredited at the national level. The Faculty of Economics is one of the six faculties that are part of the University of Tirana. It was originally established in 1952 under the name “Higher Institute of Economy”. It has offered a diploma in the fields of economy and accounting since merging with the University of Tirana (one of the oldest and most highly recognized higher education institutions in the country) in 1957. The University Segment Higher education in Albania is The Law on Higher Education and its amendments offered by 13 public universities and regulate the activities of the faculties as well as the 46 private universities, of which establishment and work of the governing bodies, over 20 offer accounting and auditing courses. All while the University Statute defines the scope of universities have several faculties. Approximately work, overall organization, and activities more 80 percent of all students are admitted to public closely. universities. Sources of funding Senate (Rectorate). International cooperation and partnerships with other institutions are also subject to The Faculty is financed 90 percent by the state approval by the University Senate. The professors have while the remainder is covered by student fees a great deal of flexibility when it comes to establishing and, to lesser extent, other sources. Students in the teaching formats as well as the formats of the exams undergraduate program pay annual fees of USD 320. and exam questions. Master’s studies are entirely funded by student fees and cost approximately USD 1,500 – USD 2,000 per The Faculty proposes the overall number of students academic year. for programs which are subject to approval by the Ministry of Education and Sports. Over the past three years, the Faculty has admitted 3,900 students or Level of autonomy about 1,300 students per year. The Faculty is free to develop new undergraduate and master’s programs after approval by the University 27 Education programs Degree Programs are one and a half year programs (60-90 ECTS). Both undergraduate and master’s There are currently four undergraduate programs programs comprise compulsory and elective courses. offered by the Faculty: (i) Management, (ii) Finance PhD studies are based on scientific research and and Accounting, (iii) Economics and (iv) Economic independent activities, including 60 ECTS of organized Informatics. The Faculty also offers master’s diplomas theoretical studies of at least three academic years (professional and scientific) in: Master of Business and include the requirement to pass an internationally Administration (MBA), Accounting and Auditing, recognized English test. Finance, Economics, Marketing, Tourism, European Economic Studies, Applied Economics and other areas. PhD studies are also available. Accreditation All undergraduate programs are for period of three Albania has been a member of the Bologna process years (six semesters and 180 ECTS). Scientific Master’s and the European Higher Education Area since 2003. All Degree programs are two year programs (four programs are accredited at the national level. semesters and 120 ECTS) and Professional Master’s The Accounting Program Well established accounting program with a long tradition, enriched with a solid practical experience requirement. Professors have excellent connections with the local profession but the program itself has weak links to national and international professional bodies in terms of exemptions offered. Type of degrees The undergraduate degree in Finance and Accounting was introduced in 1952, but was significantly The Faculty offers an undergraduate degree in Finance modernized in 1998. and Accounting (both full- and distance- learning/ part-time), a Scientific Master’s Program (MSc) in Accounting and Auditing (offered full-time only) and a Curriculum Professional Master’s (MP) in Accounting (both full- and distance-learning/part-time). A Doctoral program in The undergraduate program in Finance and Accounting Accounting and Auditing is available. The Faculty also consists of six semesters (180 ETCS credits, 26 provides specialized courses in Accounting and Finance. mandatory courses and 4 elective courses). The table below shows the accounting and auditing courses in the undergraduate program: Undergraduate First Year Second Year Third year Principles of Finance Principles of Accounting Financial Management Elective courses: Financial Accounting Cost Accounting •• Personal Finance •• Accounting Information Management Accounting Systems. 28 The Scientific Master’s Degree program is a two-year program (120 ECTS). The table below shows the core and elective accounting and auditing courses in the program: Scientific Master First Year Second Year Advanced Management Accounting Auditing and Assurance Advanced Financial Management Consulting, Assurance and Other Professional Services IFRS Standards and National Accounting Standards Research and Quantity Methods in Accounting Financial Statements Analysis Organization of the Accounting System and Control Forensic Accounting (elective course) Advanced Financial Accounting Accounting for Public and Not-for-Profit Organizations Elective courses: •• Public Finance, or •• Professional Ethics, or •• Spreadsheet Modeling. The Professional Master’s Degree Programs is a one and a half year program (60-90 ECTS) and covers the following core and elective accounting and auditing courses: Professional Master First Year Advanced Management Accounting Auditing and Assurance and Consulting Services Advanced Financial Management Organization of Accounting and Control Systems Financial Statements Analysis Elective courses: Advanced Financial Accounting •• Insurance and Banks Accounting or Professional Ethics. •• Computerized Accounting and Applied Software or Accounting for Public and Not-for-Profit Control and Internal Audit. Organizations Linkages to professional Practical experience qualification Three months of practical experience is required for both undergraduate and master’s programs. The PhD There are no exemptions offered to university Accountancy program may also require some prior graduates by the national PAOs. Graduates of the experience. bachelor studies are offered exemptions from the ACCA’s foundation level papers in: Accountant in Business, Management Accounting and Financial Curriculum updates and reviews Accounting. Master’s graduates are offered an The current curriculum was developed in 1998 with additional exception from the paper on Corporate and some changes introduced in 2014. Course syllabi are Business Law. usually updated annually. 29 GOOD PRACTICE BOX Reinforcing practical learning in university accountancy programs Practical experience is an essential component ►► Engaging established practitioners as part-time of accountancy education to reinforce learning lecturers. Around twelve part-time lecturers, through the application of knowledge in real- lecturers from foreign universities, and world situations. It also contributes to increased professional accountants and auditors (in public employability of students upon graduation. Faculty practice and industry) are regularly invited to in the Accounting Department at the University of deliver presentations, workshops and seminars Tirana reinforce practical learning through a number to both undergraduate and master’s students. of initiatives including: This approach gives students valuable insights into real-world accountancy lifestyles and ►► Introducing a mandatory practical experience working practices since it enables established requirement. All students on accounting programs practitioners to share professional experiences must complete a period of relevant practical and working methods directly with students. experience before graduation. For students on undergraduate or master’s programs, a three-month internship is required. Before enrolling on the PhD program, it is desirable that students have completed at least three years of professional experience; and Program evaluations IT technologies are used modestly in the teaching process and mainly to communicate with students. In Various methods are used to evaluate the quality of addition, there are not enough computer stations at the teaching, including annual student questionnaires, the Faculty, especially computers with internet access. discussions with student focus groups and feedback A renovated laboratory was recently inaugurated, from students’ councils. A survey of students is also comprising 30 new computers equipped with the performed at graduation. latest accounting software and curriculum that can be accessed by students. This was made possible through a World Bank project “Enhancing the Quality of Financial Teaching materials Reporting” funded by the Swiss State Secretariat The quality and availability of textbooks and materials is of Economic Affairs (SECO). The new laboratory is rated as good for most subjects. However, textbooks available for use from the beginning of the 2016/2017 and materials on Finance could be improved. English academic year and aims to strengthen teaching and textbooks are mainly used for the teaching of IFRS practical training of accounting and auditing students. Standards. The Faculty library does not have translated PowerPoint and other visual presentations are used or original versions of IFRS Standards and ISA, and only during the lectures. Teaching methods include short the 2010 version of the translated Code of Ethics is case studies, in-class exercises, as well as group and available. Students usually access translated IFRS individual project assignments. Standards and ISA from websites of the National Accounting Council (KKK) and professional bodies. All courses at the undergraduate program are taught in Albanian and some master’s courses are delivered in English. 30 Assessment methods All exams (final and interim) are written, comprising a combination of multiple choice questions, short exercises, case studies or open-ended questions. Interim tests, in-class assignments and activities contribute up to 20-25 percent of the overall course grade and final exams up to 75-80 percent. GOOD PRACTICE BOX Maintaining low teacher-student ratios Lower teacher-student ratios is a factor often cited ►► More possibilities exist to develop an individual as contributing towards the creation of a higher approach to each student; and quality learning environment. There are many ►► Teachers can engage more with students during benefits for both teachers and students in keeping the teaching process and try out different teacher-student ratios low, including: activities and lessons that might not be feasible ►► Teaching faculty members have more in a larger class size. manageable workloads; ►► More time is available to work one-on-one with students, which is essential for preparing them to deal with more complex subjects; 31 Faculty Body Well-resourced accounting department with qualified senior professors are factors which enable a good learning environment. Low salary levels present difficulties in attracting new faculty members. The teaching norm is 220 hours per annum for full-time 18 and associate professors and 260 hours per annum for senior lecturers and assistants. The teacher-student ratio is quite low and conducive Faculty to a quality learning environment. members Salaries paid to professors are considered low and, as such, present a challenge to attract new faculty members. Eight faculty members hold a local professional certification (Certified Accountant and Certified 89% Auditor) and two have the ACCA designation. Senior staff The English and Italian language proficiency of the Faculty body is considered very good. The Faculty body is involved in professional development activities such as participating in 1:25 accounting conferences and seminars and publishing Teacher to books and articles. Faculty members also participate student ratio in overseas exchange visits. Faculty Profiles 11% 11% Teaching assistants < 30 years 55% 67% Members Age 17% 22% Full time professors Senior 51-60 years 31-40 years lecturers 17% Associate professors Qualifications 44% 56% PhD Gender 78% Master 32 Student Body The demand for accounting education has been steadily growing and undergraduate and master’s accounting degrees are popular with students. 38% The demand for accounting education has been growing over the past few years and the number of students admitted into the undergraduate accounting program has increased steadily by around 6 percent Students choose annually. In 2014, 600 students enrolled (of whom accounting 450 were full-time and 150 part-time), while about programs 140 were admitted into the Accounting and Auditing master’s programs. Around 38 percent of the total number of students in the Faculty choose the Accounting undergraduate program. 6% Students’ proficiency in English is considered to be Annual increase average. in demand for accounting programs Student drop-out rates are believed to be 20 percent >80% for the undergraduate degree and 7 percent for the master’s program. Master’s graduates Linkages with the business sector find employment The Faculty has excellent links with the professional within 12 months of bodies of Accountants and Auditors in the country and graduation with international and local accountancy firms. The Faculty has established a Career Center to encourage and foster links for students with industry and it also Student Profiles facilitates student activities such as forums, workshops and recruiting events. The Faculty has no system to track graduate 50% employment after graduation. For students with Graduates employment per sector master’s diplomas, it is estimated that between 80 and 90 percent of graduates find employment within 6 to 12 months of graduation. Government and Business not-for-profit community 20% 10% Financial sector 20% Accounting and Gender 80% auditing profession 33 Benchmarking Results Master’s programs compare well against ACCA and IES benchmarks. However, they compare poorly against CIPFA benchmarks because of low coverage of public sector topics including IPSAS. The Program could benefit from the introduction of courses on Auditing and Assurance at the undergraduate level, improving Financial Reporting and Financial Management subjects, as well as enhancing Ethics, Commitment to Public Interest and IT core syllabi. Syllabus Profile against IES Benchmark Undergraduate Core Master Core SUBJECTS Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 34 Syllabus Profile against ACCA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Accountant in Business Audit and Assurance Financial Accounting Financial Management Financial Reporting Management Accounting Performance Management 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Syllabus Profile against CIPFA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Financial Accounting Management Accounting Managing Finance Managing Organizations Public Sector Financial Reporting 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 35 The Institute of Authorized Chartered Auditors of Albania (IEKA) About IEKA IEKA has been an IFAC member since 2008. It is a professional organization of Certified Auditors whose mandate is formally recognized in Albanian Law. IEKA represents 220 certified auditors, 57 audit firms and 142 sole practitioners. Membership fees are the main source of IEKA funding. IEKA was established in November 1997 as a not- experience requirements and reporting on the same for-profit, nongovernmental organization, formally to the regulator; (iv) operating a quality assurance obligated by law to ensure that the profession acts system; and (v) maintaining and updating a register of in the public interest and protects the independence auditors and statutory audit firms. and honor of its membership. Other functions of IEKA IEKA became a member of the International Federation as defined in the law include: (i) delivering IPD training of Accountants in 2008 and has developed a close to certified auditors; (ii) designing and delivering CPD working relationship with the Society of Certified programs; (iii) establishing and monitoring practical Accountants and Auditors of Kosovo (SCAAK). The Profession The Auditing and Accounting Auditors. There are three professional bodies of profession in Albania is regulated accountants: by the Law on Statutory Audit, ►► T he Association of Accountants and Finance Organization of Statutory Auditor and Certified Experts of Albania (AAFEA) is the largest Accountant Professions. The National Accounting and oldest of the three bodies, supporting Council (KKK) is the statutory auditor regulator and approximately 70 percent of the country’s Public Oversight Body while the National Accounting accountants. It has representatives on the Council is responsible for drafting and maintaining National Accounting Council and the Certification the Albanian National Accounting Standards. Authority; The Institute of Authorized Chartered Auditors of ►► The Institute of Certified Accountants (ICA); and Albania (IEKA) is the professional body of Statutory ►► The Association of Chartered Accountants (ACA). 36 Member Profile Members IEKA is a professional body of auditors only. It Gender represents 220 certified auditors, 57 audit firms and 55% 142 sole practitioners. Resources Membership fees are the main source of income for Funding IEKA. The annual budget is approximately EUR 1,300 per member. Qualification 13% programs Governance 73% The Assembly of Members is the ultimate governing body and it elects the Council members at its annual meetings. The Council comprises seven members appointed for two-year terms who may be reappointed Membership for up to two consecutive terms. fees 14% There are five IEKA committees, each headed by a Other Committee Chairman who is also a member of the sources IEKA Managing Council: (i) Quality Control Committee; (ii) Professional Education Committee; (iii) CPD €1,300 Committee; (iv) Investigation and Discipline Committee; Approximate annual and (v) Ethics Committee. There is also an Internal budget per member Control Committee that operates like an internal audit department in that it is charged with reviewing the legality of IEKA’s operations. Governance Bodies IEKA’s committees are dominated by males and only one of its seven Council members are female. Committee members are mostly comprised of Gender 67% practicing members. 86% of Managing Council members are male Staff The IEKA Executive Office has six full-time employees (an Executive Director, one staff member working on education and examination duties, three who provide administrative support, and one staff member charged with external relations) as well as 23 part-time consultants (most of whom are committee and council members). The Executive Office is led by an Executive Director who reports to the Council and has a term of four years with the possibility of reappointment. 37 Education and Training Program The content and structure of the professional education program is prescribed in law and the Certifying Authority has a substantial administrative role during professional examinations. IEKA provides professional training to prepare candidates entering the profession and also supports the Certifying Authority in developing the examination papers. Entry requirements IEKA provides training programs to prepare candidates entering the Certified Auditor Stream, while the The entry requirements for IEKA’s professional professional bodies of accountants provide training to training program are determined by law. Candidates candidates for the Certified Accounting Stream. The are required to hold a master’s degree from a general content of the professional education program higher education institution in the field of economics, is published on IEKA’s website, including information accounting, finance, business administration or a about the program, examination methodology and the similar field of study. Aspiring candidates must also be associated program costs. residents of Albania and not be subject to disciplinary charges. The syllabus and exam structure are too theoretical and there is a need for a more practical approach to the syllabus and exams. There are no overall learning Demand outcomes, competences, or skills specified for the The demand for the certification program has course program. The auditing and accounting training been growing and there are approximately 50 new programs should integrate technical knowledge, admissions on average to the IEKA training program professional skills, and professional values, ethics and annually. attitudes, across topics and disciplines to deal with complex situations. The programs should also cover the required IES level of proficiency, as well as stimulating Content candidates to develop professional skepticism and professional judgment. The content and structure of the professional education program is prescribed in law and covers written tests in the following areas: Certified Auditor Stream Certified Accountant Stream Professional Program Accounting, Financial Reporting and Financial Statements Accounting, Financial Reporting and Financial Analysis Statements Analysis Albanian Civil Law, Penal Law, Commercial and Company Albanian Civil law, Penal law, Commercial and Law, and Labor Law to the extent they relate to the Company Law, and Labor Law to the extent they statutory audit of financial statements relate to the statutory audit of financial statements Code of Ethics for Professional Accountants, ISQC, ISA, International Audit Practice Statements, International Statements on Review Engagements, International Standards on Assurance Engagements and other International Standards issued by the IAASB and published in Albanian, as well as regulations on the organization of the statutory auditor’s profession Organization, Management and Internal Control of Companies, Including Information Systems and Computing Taxation Law in the Republic of Albania 38 Curriculum updates and reviews Practical experience requirement No substantial reviews and updates are performed To enter the Certifying Authority examination process, because the requirements are fixed in law. a candidate requires between three and five years of relevant practical experience undertaken under the supervision of a statutory auditor. At least two- thirds Examinations of the practical experience must be obtained in full- time employment with a statutory auditor or audit firm. The Certifying Authority does not have an education A candidate requires at least 600 hours per year work department and its role is limited to administrative experience on audit engagements. tasks. It relies on inputs from IEKA and professional experts in developing the examination papers. IEKA’s Education and Professional Qualification Examination sessions take place once per year. Committee is responsible for making an assessment of each candidate to determine whether they meet Exam assessment methods comprise written exams. the practical experience requirements to enter the IEKA has the right to make suggestions regarding Certifying Authority examination program using an examination materials, which is subject to the National input-based approach. Candidates and students Accounting Council (KKK) approval. document the work they perform. Eligible supervisors Average pass rates for all exams fall in the range of are practicing statutory auditors (firms or sole between 35 and 40 percent. The average period for practitioners). The progress of candidates is evaluated examination completion is between four and six years. by supervisors on a six-month basis and the supervisor There are between 15 and 20 successful candidates is obliged to report on such progress to IEKA. The annually. Education and Professional Committee evaluates each candidate’s progress every year and proposes a list Papers contain a combination of multiple choice of eligible candidates for further membership approval questions (about 30 percent) and exercises (about 70 to the Managing Council. percent). A pool of five exam papers is prepared for each module and on the day of the exam an examination paper is chosen from the pool. Although exam marking Recognition is performed by different staff to those who prepared the exam papers, no double marking is undertaken. Candidates who are Albanian citizens and either hold The pool of examination papers is developed by the an ACCA practicing certificate or have qualified as a IEKA Education Committee and professional experts, USA Certified Public Accountants (CPA), are exempt and the Certifying Authority has the right to review from all papers except taxation and law. To date, 14 the exam questions and control the quality. candidates holding ACCA and CPA (USA) have had their foreign qualifications recognized under the IEKA Some improvements to the examination assessment education program. methods could be made such as preparing examination papers so as to test all required professional skills ACCA offers exemptions from foundation level papers and abilities. This could be done by selecting and in: Accountant in Business, Management Accounting, integrating principles and theories from the different and Financial Accounting for candidates who have areas of required technical competency. It could obtained the Certified Auditor designation. also involve using different examination techniques which would better examine the ability and skills of candidates to synthesize and evaluate information. In addition, introducing double marking would greatly help reduce subjectivity and increase the effectiveness of marking scripts. Finally, each marker should use the same marking schedule as this would give consistency to the process. 39 Continuing Professional Development (CPD) The CPD requirement for Certified Auditors is prescribed by law and currently IEKA is the only CPD provider. The training programs are tailored to satisfy the needs of IEKA members and cover ISA professional ethics, regulatory and tax updates. Challenges remain to reform the system by exploring modern methods of CPD delivery as well as introducing learning outcomes and more advanced and complex topics for audit partners. Requirements Measurement methods The CPD requirement is set by law at a minimum The measurement method for CPD completion is of 40 verifiable annual hours and is mandatory for mainly input-based (a method that provides verification all Certified Auditors. Admissible CPD units and by documenting time spent in the relevant role) by activities include workshops, seminars and roundtable verifying that the 40 annual hours of verifiable CPD have discussions which are delivered in accordance with been undertaken. Elements of an output-based system IEKA’s annual CPD program. Attendance at conferences are emerging (assessment of professional knowledge as well as writing articles and books (both professional via periodical testing of knowledge). However, there and academic) are also allowable CPD units, above and is a need to introduce a more structured approach over the admissible 40 verifiable units. which would focus on the achievement of the learning outcomes required by the revised IES 8 which became Although the law permits other CPD providers such effective in July 2016. as higher education institutions, professional training centers and audit firms, IEKA is currently the only CPD IEKA communicates the importance of CPD to its provider in practice. Other potential CPD providers members through webpage notices and bulletins. should notify the regulator of their intent to offer CPD As the only provider of CPD, IEKA keeps a detailed log activity and IEKA has the right to supervise these for each members CPD hours achieved and is obliged CPD providers. Appropriate resources and technical to report to the regulator members who fail to comply. knowledge should be demonstrated by other potential If a member does not meet the CPD obligations, the CPD providers. law foresees revocation of membership and audit The main method of CPD delivery involves classroom license, although in practice IEKA has not taken such training activities which are organized twice per year action as members have complied with the CPD in lengthy CPD sessions. The sessions last for between requirement. two and four consecutive days and include a large audience of between 200 and 300 participants. IEKA management is currently reviewing possibilities to improve the CPD system in order to meet members’ demands by, for example, developing online training, applying computer tools and software in teaching ISA and introducing more advanced and complex CPD topics for more experienced professionals. 40 GOOD PRACTICE BOX Monitoring and assessment of competence developed through CPD IEKA’s Managing Council is mandated by law measures where applicable. These measures may to conduct periodic tests of knowledge gained include revoking membership. IEKA is also required during CPD in order to assess the professional to perform monitoring activities to ensure that the competence of its members. These assessments CPD records provided by statutory auditors are should be performed on a cyclical basis of between accurate and complete. three and five years. IEKA is required to make the Should false declarations be observed, IEKA results of the assessment public and to file a copy Managing Council is required to revoke membership with the regulator. and inform the regulator who reflects the revocation The IEKA Managing Council reviews the results of status in the register of statutory auditors. of the testing and is required to take corrective CPD program training in soft skills. IEKA gathers input and feedback from participants after each CPD session and takes The CPD program offered by IEKA is tailored primarily such feedback into account when designing future CPD to satisfy membership needs in technical and courses. The final CPD annual plan and its content is professional topics. There appears to be sufficient approved by the IEKA Managing Council. coverage of ISA and professional ethics, financial reporting and IFRS Standards, and a significant part CPD trainers are usually IEKA subcontractors and of the annual CPD (about 30 percent) comprises include knowledgeable practitioners, university regulatory and tax updates. The CPD program offerings professors, as well as specialists holding key positions are not segmented to meet the needs of the following: in relevant state institutions such as the tax authorities. professionals with varying levels of experience; those CPD resources are mainly IFAC manuals and guides, who work in specialized fields; and those requiring which are translated into the local language. CPD Courses 30% 25% 20% Taxes and Auditing standards and updates 25% Financial reporting regulatory and accounting Professional Ethics updates and other 41 Benchmarking Results Compared to IES, the professional Certified Auditor program only scores well in a few areas, including the relevant topics of Financial Reporting, Auditing and Assurance, Professional Ethics, and Professional Skepticism and Judgment. Information Technology is not covered at all and represents a significant gap when compared to the IES and ACCA benchmarks. Very few learning outcomes with advanced proficiency are included in the Certified Auditor program. Syllabus Profile against IES Benchmark Certified Accountant Certified Auditor SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 0% 20% 40% 60% 80% 100% 42 Syllabus Profile against ACCA Benchmark Certified Accountant Certified Auditor SUBJECTS Accountant in Business Advanced Audit and Assurance Advanced Financial Management Advanced Performance Management Audit and Assurance Business Analysis Corporate Reporting Financial Accounting Financial Management Financial Reporting Governance, Risk and Ethics Management Accounting Performance Management 0% 20% 40% 60% 80% 100% 43 44 Bosnia and Herzegovina at a glance About the School: SEBS is one of the leading higher education institutions in the country with a mission to achieve international recognition. The School relies primarily on student fees and to a lesser extent on state funding. Accounting program: Students can major in accounting and auditing. There is a practical internship requirement which aims to prepare students for the job market. A number of programs have been accredited at the European level including availability of joint and twinned programs. However, there is University of Sarajevo, low recognition of programs with local and School of Economics and Business international PAOs. Sarajevo (SEBS) Faculty resources: Balanced mix between senior and Demand and trends: Student admission to the junior teaching staff and a low teacher to student ratio Faculty is based on annual quotas. Demand for in the final year of study. Active engagement with accountancy programs is stable at both the local and international audit firms, businesses as well undergraduate and master’s levels. as PAOs. Practitioners are involved in the teaching process on a part-time basis. Benchmarking results: The curricula score well when benchmarked against the ACCA. The Master’s program also scores well against CIPFA. The undergraduate program has less coverage of IPSAS and achieved lower scores in this area. Further, the undergraduate program could benefit from greater alignment with the learning outcomes outlined in IES 2 and IES 4. 45 About AAARS: IFAC member since 2010 The Association of and of FEE since 2015; membership largely Accountants and comprises Certified Accountants and Certified Auditors of Republic Accounting Technicians. Primary source of funding is CPD program fees. Srpska (AAARS) Professional education and training program: Follows a progression model with exit points at three levels based on the preferences of the candidate. Practical experience About the Faculty: Qualified and experienced requirements are in place. The program could professors have established close cooperation benefit from prescribing learning outcomes with leading universities and business schools for professional skills, and professional values, in the country and abroad. Funding is primarily ethics and attitudes. from the state. Programs are accredited at national level. CPD requirement: Prescribed by law for Certified Auditors and is a condition of AAARS membership for Certified Accounting Accounting program: The Faculty offers Technicians and Certified Accountants. undergraduate and master’s level accounting programs. There are few linkages with the local professional accountancy programs but there is no system in place for mutual recognition and exemptions. Some exemptions are available for the ACCA program. Benchmarking results: Improvements to the following components would lead to greater alignment with IES benchmarks: Governance; Risk Management and Internal Control; Demand for accountancy education: Increasing Economics; Business and Organizational demand for accountancy education. Nearly a Environment; and Ethics. third of all undergraduate students enroll in the Accountancy program. Students benefit from a number of opportunities to engage in the job market. Benchmarking results: The accounting programs score relatively well at the undergraduate and master’s level against University of Banja Luka, the benchmarks. The programs could have Faculty of Economics a greater focus on Ethics and Commitment to Public Interest in order to improve their alignment with IES 4. 46 Key survey facts 3 630 Respondents 6 Students Educational Programs Accountancy Education Framework in Bosnia and Herzegovina Bosnia and Herzegovina has are the competent authorities to provide practice adopted a Framework Law on licenses to authorized auditors. The Framework Accounting and Auditing that harmonizes the Law sets the maximum requirements for education, accounting and auditing regulations and legislation licensing and training. Entities cannot impose adopted by both decentralized Entities (i.e. the additional requirements to that law in terms of Federation of Bosnia and Herzegovina – FBH and education, examination and professional training. the Republic of Srpska - RS). Each Entity enjoys a The law also stipulates that an audit report is valid high level of autonomy with separate Ministries of throughout Bosnia and Herzegovina, regardless of Finance, laws and institutions. Requirements for which entity the auditors reside in. The Accounting educational qualifications, practical experience and Auditing Commission has also provided a and training, continuing education and testing of mechanism for co-operation among the entities’ theoretical knowledge are determined by the professional bodies, leading to a unified framework Bosnia and Herzegovina Accounting and Auditing for the education, training and CPD requirements Commission. The Framework Law has harmonized for accountants and auditors. the professional titles (Certified Accounting The two professional bodies that enjoy statutory Technician, Certified Accountant and Authorized recognition are the Union of Accountants and Auditor, reflecting progressive sets of education Auditors and Financial Workers of FBH (SRRF-FBH) and work experience requirements) and the entry and the Association of Accountants and Auditors requirements to the accountancy profession. of Republic Srpska (AAARS). The Association of Professional bodies issue certificates and licenses Auditors in FBH is an auditor chamber performing for accountants and the qualification for authorized roles within the quality assurance process. auditors while the Entities’ Ministries of Finance Contacts Zeljko Sain Novak Kondic Mirela Bojic University of Sarajevo, Faculty of Economics, The Association of School of Economics and Univeristy of Banja Luka Accountants and Auditors Business Sarajevo of Republic Srpska (AAARS) zeljko.sain@efsa.unsa.ba kontakt@efbl.org mirela.bojic@srrrs.org www.efsa.unsa.ba www.unibl.org www.srrrs.org 47 University of Sarajevo, School of Economics and Business Sarajevo (SEBS) About the School SEBS is one of the leading higher education institutions in the country with a clear mission to become a prestigious education institution in the area of economics and business sciences in Southeast Europe by 2025. Achieving an Education Policy and Accreditation Standards (EPAS) program accreditation and an Association to Advance Collegiate Schools of Business (AACSB) institutional accreditation as well as the availability of many joint and dual diploma programs confirm SEBS’s ambition to achieve global recognition. The School of Economics and Business in Sarajevo Sources of funding (SEBS) is part of the public University of Sarajevo, which was established in 1952. SEBS is one of the Student fees comprise the main source of funding, leading higher education institutions in the country followed by government funds which account for 37 and is strongly devoted to creating a modern learning percent of the overall budget. environment with up to date curricula reflecting current trends in the fields of economics, management and business administration. The mission of SEBS is Level of autonomy to become a prestigious education institution in the SEBS is partially autonomous in designing or changing area of economics and business sciences education in the structure of the curricula as well introducing new Southeast Europe by 2025. programs, assessment methods and establishing academic partnership with other institutions. Such Funding Sources matters do, however, need to be approved by the University and in some cases the Ministry of Education, Science and Youth of Canton Sarajevo. 5% SEBS offers a wide range of programs designed 52% Projects and implemented in various fields of economics, management and business. Programs in English language on undergraduate, master and Doctoral levels are also offered. Student fees The overall number of students admitted to the School 37% Government 6% is determined by annual quotas set by the Ministry of Education, Science and Youth of Canton Sarajevo. Other 48 Education programs Accreditation There are currently four bachelor degree programs Bosnia and Herzegovina became a Bologna-signatory offered at the School: (i) bachelor program in country and a member of the European Higher Economics, (ii) bachelor program in Management, Education Area in 2003. (iii) bachelor program in Applied Business; and (iv) SEBS has achieved the following certifications and a double degree program conducted with Griffith accreditations: College Dublin. In addition to two master’s programs conducted independently by SEBS (a master’s program •• In 2009, SEBS became the first higher education in Economics and a master’s program in Management), institution in the country to be certified by Bureau it offers six master’s programs, most of which are Veritas for its quality management system, twinning and joint programs with other foreign and which was developed in accordance with the ISO domestic universities. One PhD program (with two 9001:2008 for higher education; concentrations: in Economics and in Management/ •• In 2011, SEBS was accredited by the Agency for Business) is offered as well as one DBA program Quality Assurance and Accreditation Austria for (Executive Doctorate). its internal quality management system for the There are approximately 700 admissions per year performance area of Studies, Teaching and Further to the undergraduate program (of which around 400 Education; graduate every year) and 400 student admissions to •• In 2012, the European Foundation for Management the master’s programs (with 200 graduates per year). Development (EFMD) awarded it the EPAS program accreditation for the undergraduate programs All undergraduate programs last for three years (six Financial Management and Marketing Management semesters and 180 ECTS). Master’s programs are both (conducted fully in English) for the initial period of one and two year programs. Undergraduate, master’s three years. In 2015, these programs were re- and doctoral programs are composed of compulsory accredited for an additional three years; and elective courses. GOOD PRACTICE BOX Achieving globally-recognized standards in higher education The mission of SEBS is to become a prestigious Programs at all levels of study were developed education institution in the area of economics based on the learning expectations that were and business sciences education in SEE by 2025. systematically connected with learning outcomes, To achieve this goal, SEBS engaged in the pursuit in a way that enables regular revisions and of two prestigious international accreditations: quality measurement. In the process of curriculum the European Foundation for Management development, SEBS has included inputs from all Development (EFMD) EPAS program accreditation relevant stakeholders: students (through focus and the Association to Advance Collegiate Schools groups); teaching staff (through strategic planning of Business (AACSB) institutional accreditation. with SEBS’s departments); and the business community (through sessions of SEBS’s Business In order to meet the requirements of these Advisory Board and Alumni Association). bodies, SEBS systematically revised its core and support processes. Over a decade-long period, With the achievement of EFMD/EPAS program all aspects of SEBS’s operations were enhanced accreditation in 2012 (and subsequent re- and redesigned to meet the highest standards of accreditation in 2015) and AACSB institutional quality in modern education, including its: strategic accreditation in 2015, SEBS is a role model for management, curriculum development, design and the successful implementation of relevant, high delivery of programs, scientific research, quality quality and globally recognized standards in higher management, and support services. Particular focus education. was placed on student learning. 49 •• In 2015, SEBS received the accreditation issued by •• Joint master’s program with Adizes School of the U.S. based accreditation body: the Association Management; to Advance Collegiate Schools of Business (AACSB). •• Joint master’s program with the Faculty of This is an institutional accreditation. Economics at the University Dzemal Bijedic of Mostar; In its efforts to achieve a high level of international •• Joint master’s program in “Islamic Banking” with the recognition, SEBS has developed and implemented University of Bolton, UK; joint, double and twinning programs with a number of partners, including: •• Double degree program at the Sarajevo Business School, conducted with Griffith College Dublin, •• Double degree master’s program with the Faculty Ireland (accredited by Quality and Qualifications of Economics, University of Ljubljana, Slovenia Ireland). (Accelerated Masters in Business Administration (AMBA), AACSB and EFMD/EQUIS accredited); •• Twinning master’s program with the Faculty of Economics, University of Zagreb, Croatia (EFMD/ EPAS accredited); The Accounting Program The Management stream of studies provides students with the possibility to major in Accounting and Auditing. The program was last updated for the academic 2015 / 2016 under the regular five-year review cycle. There is a practical internship requirement aiming to develop a number of competences that prepare students for the business world. Recognition of programs with local and international PAOs is weak. Type of degrees In addition, SEBS has introduced two programs in the fields of accounting and auditing through joint Two main education streams are offered at the cooperation with the Faculty of Economics University undergraduate level of study: Economics and of Zagreb, Croatia: Financial Reporting and Audit, Management. Students who take the Management and Accounting and Taxes. Doctoral studies (PhD in stream can opt to study Accounting and Auditing Business/Management, PhD in Economics or DBA) courses and receive an undergraduate bachelor in allow students to take courses from the accounting Management with a concentration in Accounting field and to undertake their PhD or DBA thesis in and Auditing. The undergraduate programs with a accounting. concentration in Accounting and Auditing have been offered since SEBS’ establishment in 1952. Despite having a distance learning capacity, programs devoted to accounting and auditing at both At the master’s level of study, students can opt for undergraduate and master’s level are delivered only the program in Accounting and Auditing. However, the on a full-time basis. This is because these programs program is only organized if the number of interested are highly demanding in terms of the knowledge and applicants is sufficient. skills that need to be acquired and are best met with full-time student engagement. 50 Curriculum The undergraduate program is three years in duration and consists of six semesters (180 ETCS credits).The table below shows the core and elective accounting and auditing courses in the programs: Undergraduate First Year Second Year Third year Accounting Financial Accounting Cost Accounting Accounting for Not-for-Profit Organizations Financial Management Financial Institutions Financial Reporting Accounting Management Accounting One elective course from the Audit following: Tax Accounting; Accounting for Banks; Audit of Not-for-Profit Organizations; Accounting in the Merchandize Type Enterprise. The table below shows the core and elective accounting and auditing courses in the master’s program: Master First Year Second Year Financial Accounting and Financial Reporting Financial Institutions Accounting II Cost Accounting II Elective Subjects: Auditing and Audit Reporting •• Not-for-Profit Organizations Auditing II Budget Accounting •• Tax Accounting II Managerial Accounting II •• Islamic Accounting II Not-for-Profit Organizations Accounting II •• Securities Accounting II Business Analysis II •• Investment and Amortization Models Accounting in Banks II Linkages to professional Practical experience qualification Internships are a compulsory requirement of the undergraduate program. Master’s programs do not There are no exemptions for graduates when applying require practical experience. to join the professional examination program with any of the PAOs in Bosnia. The ACCA offers exemptions to students who have completed the undergraduate diploma with a major in Accounting and Auditing Curriculum updates and reviews from the following foundation papers: Accountant The structure, content and curricula of the in Business; Management Accounting; Financial undergraduate and master’s programs were last Accounting; and Corporate and Business Law. updated in 2015/2016, as part of the regular five-year review cycle. 51 GOOD PRACTICE BOX Developing technical and professional competencies through practical experience At SEBS, practical experience of at least 22 days Two supervisors are assigned to each student is a mandatory component of the undergraduate undertaking an internship program: one from the accounting program. Most students find internship company providing the internship and another opportunities with local or international professional appointed by the SEBS faculty. Students are required accountancy firms or with financial institutions. to prepare a report on completion of the internship which is evaluated by the SEBS supervisor. The Students are expected to develop technical and supervisor from the company evaluates the professional competencies during the internship. student’s professional attitude and professional These include the ability to critically assess skills. professional issues, seek solutions independently or in a team, demonstrate professional behavior and attitude, and show initiative on an individual or team basis. Program evaluations Each program is evaluated through a rigorous and formalized process on an ongoing basis and through a number of initiatives. Students evaluate the work of the academic faculty and the organization of the exams through structured questionnaires. The SEBS Quality Management Office analyzes the results for each member of faculty, course and exam, and delivers this information to management for future improvements and corrective measures. GOOD PRACTICE BOX Establishing regular curricula review processes Introducing regular cycles for curricula review the undergraduate and master’s programs was is an important activity that ensures teaching conducted in 2015/2016. Smaller changes and processes and program curricula are aligned with updates are performed on an annual basis. the stakeholder’s skill needs and the expectations Curricula reviews at SEBS are a peer-review of future graduates. Because the accounting and process. This process is motivated by the need audit profession is exposed to rapid and frequent to meet the demand of the accreditation bodies changes (e.g. changes driven by modernization of and the many stakeholders including students, technology or changes in accounting and auditing faculty, the business community, employers and standards), shorter review cycles, ideally between administrative staff. Input from the Business three and five years, are desirable. Advisory Board (BAB) of SEBS relates to the skills At SEBS significant changes to the curriculum are and knowledge that the business sector expects performed in five-year review cycles. The last from future graduates and incorporates them into update to the structure, content and curricula of the curricula updates. 52 SEBS Testimonial “ At SEBS, the strongest emphasis is placed on the continuous improvement of the teaching process and programs’ curricula. SEBS introduced a new curriculum in September 2015. The initiative for changes in the curriculum design over the past five years has been encouraged by the need to meet the demand of the accreditation bodies and the many stakeholders including students, faculty, business community and administrative staff. SEBS participated in the CFRR pilot accountancy education benchmarking study performed in late 2014 and ” incorporated the results of this analysis into the curriculum revision process. The Study helped identify the discrepancies between SEBS’s accounting and auditing programs and the best international practices. It also provided SEBS with the tools to improve the learning experience for its students. With these results, along with all other inputs mentioned above, SEBS has managed to upgrade and redefine curricula for its accounting and auditing programs and bring them one step closer towards the highest international standards. Teaching materials IT technologies are used effectively and there are sufficient number of computer stations available with The quality of textbooks is assessed as very good. internet access. Learning outcomes and course objectives are well documented. More materials could be made available, especially up to date accounting and auditing subject Assessment methods books and materials in the School library. There is excellent use of English language materials. The main assessment methods are: interim written exams (accounting for between 40 and 65 percent of Teaching methodologies include approximately 50 the final grade); written final exams (up to 50 percent); percent lectures and presentations and 50 percent and group assignments, presentations and quizzes (up case studies. Some courses, such as Management to 20 percent). Accounting and Cost Accounting, also include instruction via facilitated group assignments and Written examination questions usually comprise projects. It is expected that, in addition to acquiring multiple choice questions, short open ended conceptual technical skills to measure and evaluate accounting questions, short problem-solving scenarios, and case information, students will develop analytical and critical studies. Interim tests last 45 minutes and final exams thinking skills, communication and presentation skills three hours. Although most exams are closed-book, (written and oral), and team work abilities. some professors allow reference books in the first 15 minutes of an examination. GOOD PRACTICE BOX SEBS’ strategy for managing its interface with the corporate world SEBS formalized its collaboration with the business course design; community by establishing a Business Advisory ►► E xecutive education and life-long learning needs; Board in 2005. This Board includes representatives and from some of the most successful companies in the country and provides SEBS with information ►► I nternships, career placement, recruitment and regarding the needs of the business sector, such selection processes. as: The Business Advisory Board’s main task is to guide ►► Skills and knowledge that the business sector SEBS towards satisfying the needs of the business expects from graduates. This information feeds sector so that courses and curricula are designed into the education process, including future appropriately. 53 GOOD PRACTICE BOX Ensuring the quality of higher education programs through rigorous quality assessment processes The effectiveness of the teaching process at SEBS ►► Assessment methods (pre-quizzes, post- is assessed on an ongoing basis through a number quizzes, presentations, case studies, individual of initiatives monitored by the Quality Management research papers, team/group work); Office. Management at SEBS adopted 80 quality ►► IT support (E–Library, E-English, etc.); and indicators and 30 key performance indicators for measuring the overall quality of its programs. These ►► Support services (Career Center, Students indicators of teaching effectiveness include the Admission Office, Library Information Center, quality of: International Office, etc.) ►► Faculty (performance, reporting systems, evaluation – by students, publishing outputs, The SEBS Quality Management Office provides the etc.); results of the quality assessment to management and proposes areas for future improvements and ►► Curriculum delivery (teaching methods, corrective measures to address gaps that have innovations, organization, pedagogical been identified. competences); ►► Curriculum management (student-faculty contact, benchmarking, external reviews, alumni and business advisor input); GOOD PRACTICE BOX Using IT tools to support the teaching process IT (online) tools play an important role in SEBS’s etc.). For distance learning students a distance efforts to provide maximum support to students by: learning Course Management System is in place and there is also an E-English Course ►► Facilitating access to academic staff: Tools Management System. Another useful resource include online office hours whereby students is the E-library, which provides online access to can contact Faculty members, and a direct textbooks and literature. email messaging system – a groupware platform designed to provide all students with an email address to engage in communications with the Other IT tools that facilitate the teaching process Faculty; and include: ►► Facilitating access to teaching materials: The ►► An electronic grading system; Course Management System platform available ►► Personalized e-cards for students to track to full-time students enables teaching materials attendance and other information; and to be distributed online, and supports modern teaching methods (video, web casts, simulations, ►► A student web portal. 54 Faculty Body Balanced mix between senior and junior teaching staff and a low teacher-student ratio in the final year of study. Practitioners are involved in the teaching process on a part-time basis. There are seven full-time Faculty body members at the Department for Accounting and Auditing and two part-time faculty members, who are also practitioners. 9 The teaching norm ranges between 120 and 180 hours Faculty for professors (full-time, associate and assistant members professors) and amounts to 300 hours for teaching assistants. Professors’ salaries are sufficient to retain current Faculty members and attract new members. The teacher-student ratio in the final year of study is 55% Senior staff five students per professor and is considered to be optimal. The English language proficiency of the Faculty body is excellent. The Faculty body participates in professional 1:5 development activities such as attending accounting Teacher to conferences, seminars and publication of manuals. student ratio There is some involvement in publishing books and (in the final year) articles in accredited journals although the Faculty is not engaged in exchange visits abroad. Faculty Profiles 11% 11% Assistant professor 51-60 years 11% 45% 67% Members Age Full time professors 22% Teaching 61-70 years 31-40 years assistants 33% Associate professors Qualifications 38% Master 62% Gender 78% PhD 55 Student Body Strong and formalized relationship with the corporate world though a Business Advisory Board. Other linkages with the business sector include opportunities to interact with the corporate world through career days and internship requirements. 21% The trend for accounting education has remained stable and moderate. Every year between 30 and 40 students opt for accounting and auditing programs at the bachelor level while between 25 and 30 students Students choose opt for accounting and auditing programs at the accounting master’s level. programs The student drop-out rate in 2013 was 8 percent. The students’ English language proficiency is assessed as very good. 4 years Average time to Average number of years required to complete complete degree a degree is four years. The average period of unemployment after graduation is about six months. Between 17 percent and 20 percent of all graduates 56% work in accounting and auditing. Students find employment within 6 months of Linkages with the business sector graduation The School has an active engagement with local and international audit companies, the business community and PAOs. Opportunities for students to interact with the corporate world are also provided via career days, organized twice per year, as well as through Student Profiles practical experience and internship requirements for the undergraduate programs. 50% SEBS has also established a close formalized Graduates employment per sector relationship with the corporate world through the Business Advisory Board, which acts as a counseling body composed of representatives from the most successful companies in the country. Interaction with the corporate world is also maintained through SEBS’ 20% Business community Alumni Association. Financial sector 13% Government and 17% not-for-profit Accounting and Gender 77% auditing profession 56 Benchmarking Results The curricula benchmarking scores well when compared to the ACCA benchmark. The reason for the shortfall when compared to CIPFA is the lack of IPSAS coverage in the undergraduate program (both core and with elective courses) but this gap is narrower at the master’s level. The program would benefit from the introduction of more learning outcomes aligned with IESs, especially concerning Ethical Principles, Commitment to the Public Interest, Governance, Risk Management and Internal Control. Syllabus Profile against IES Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 57 Syllabus Profile against ACCA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Accountant in Business Audit and Assurance Financial Accounting Financial Management Financial Reporting Management Accounting Performance Management 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Syllabus Profile against CIPFA Benchmark Undergraduate Core Master Core SUBJECTS Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Financial Accounting Management Accounting Managing Finance Managing Organizations Public Sector Financial Reporting 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 58 University of Banja Luka, Faculty of Economics About the Faculty The Faculty has established close cooperation with many prestigious universities and business schools in the country and abroad. Most of the university’s funding is sourced from the Government. All programs are accredited at the national level. The Faculty of Economics is part of the public University Level of autonomy of Banja Luka, Republic of Srpska. The Faculty was established in 1975, initially as the Department of the The Faculty is not autonomous in developing the Faculty of Economics at the University in Sarajevo. The structure of the curricula which is defined by the Law on Higher Education of Republic of Srpska and Government of the Republic of Srpska. The overall the Statute of the University of Banja Luka are the number of students admitted in the Faculty is main regulations under which the Faculty operates. The determined by annual quotas set by the Government. Faculty cooperates with many prestigious universities and business schools in the country and abroad. Education programs The Faculty offers three levels of study: bachelor, Sources of funding master’s and doctoral programs. There are currently Most of the funding is from the Government (60 six bachelor degree programs offered by the Faculty: percent). (i) Accounting and Auditing; (ii) Actuary; (iii) Financial Management, Banking and Insurance; (iv) International Economics; (v) Management and Entrepreneurship; Funding Sources and (vi) Economic Analysis and Policy (a new program introduced 2015/2016). All undergraduate programs last for four years (eight 2% semesters, 240 ECTS). Master’s programs last one 60% Other year (two semesters, 60 ECTS). Government 38% Student fees 59 Undergraduate Programs admissions per year graduates per year 32 24 27 22 48 70 62 53 15 Accounting and Actuary Financial International Management and Auditing Management, Economics Enterpreneurship Banking and Insurance Accreditation All programs are accredited at the national level only. Bosnia and Herzegovina has been a member of the European Higher Education Area since joining the Bologna process in 2003. GOOD PRACTICE BOX Fostering an inclusive environment for disabled students The Disabled Students Support Center at the The Support Center nurtures an educational University of Banja Luka was founded in 2006 by the environment which is inclusive and ready to support Association of Citizens “Info Part” and later grew students with disabilities in the following ways: into an organizational unit of the University. building and maintaining partnerships with the faculties and academic as well as non-academic The Help Center represents the Coordinating staff; promoting awareness of disability among Body at the University whose task is to ensure an all the members of the University community; and equal approach for disabled students to all of the ensuring guidelines with regard to the University’s University’s programs and activities. policies and procedures, thus enabling students with disabilities to participate fully in all aspects of University life. 60 The Accounting Program There is a weak link with the professional education program and there is no system in place for mutual exemptions and recognition. Students are not required to participate in practical internship programs. Lectures tend to dominate the learning experience. Type of degrees The Faculty offers an undergraduate degree in Accounting (full-time) and a master’s degree in Accounting (both full- and part-time). The undergraduate program in Accounting has been offered since the Faculty was established in 1975. Curriculum The undergraduate program consists of eight semesters (240 ECTS credits). The table below shows the core and elective accounting and auditing courses in the program: Undergraduate First Year Second Year Third year Fourth year Financial Managerial Accounting Auditing Theory and Policies of Financial Statements Accounting Financial Management Strategic Financial Management (elective course) Specialized Accounting Accounting Information Systems Auditing of Financial Statements Elective courses: •• Accounting of Banks and Insurance Companies •• Internal Control The table below shows the accounting and auditing core and elective courses in the master’s program: Master First Year Advanced Auditing Elective courses: Financial Reporting in Management Function •• Consolidated and Special Financial Statements •• Specialized Accounting •• Corporate Finance 61 Linkages to professional Teaching materials qualification The quality of textbooks is assessed as very good. The availability of materials in the Faculty library could There are no exemptions for graduates when applying be improved and most of the available materials are to join the professional examination program. not up to date (for example, the library stocks a 2004 ACCA offers exemptions from foundation level papers translated version of IFRS Standards and a 2009 version in Accountant in Business, Management Accounting, of the SMEs Standard). There is moderate use of English Financial Accounting and Corporate and Business Law language materials. to students who have completed the undergraduate Teaching methodologies include approximately 60 diploma with a major in Accounting. percent lectures and presentations, 20 percent case studies, and 20 percent assignments and projects. Practical experience Beside technical skills to measure and valuate accounting information, graduates are also expected There is no practical experience requirement for to develop interpersonal skills, team work and group undergraduate, master’s or doctoral programs. dynamics skills, communication and presentation skills (written and oral), analytical skills and critical thinking skills, and the ability to use IT technologies. Curriculum updates and reviews IT technologies are currently used mainly for New programs are introduced every four years to communicating with students and a sufficient number bring curricula in line with labor market needs. Smaller of computer stations with internet access are available. changes and updates to courses are performed on an annual basis. Assessment methods Program evaluations Examination assessments include written interim tests (approximately 40 percent of final grade), final Periodical surveys performed by the Alumni Center oral exam (50 percent) and individual projects and provide input to future curricula reforms and valuable assignments (10 percent). information on the skills required by the labor market. Each course and program is also evaluated through Written examinations usually comprise multiple choice student evaluation surveys. questions, short case studies with narrative or a combination of narrative and computational elements, large essay questions with limited situational instruction, short scenarios or problems. 62 Faculty Body Qualified and experienced team of professors. Professors’ salaries are considered low and insufficient to retain current faculty and attract new faculty members, which may be a concern in the medium term since most professors are approaching retirement age. The teaching norm is 180 hours per academic year (or six hours per week) and the teacher-student ratio is 1:54. 7 Faculty Professors’ salaries are very low and not sufficient to members keep current Faculty members and attract new staff. This may present a concern in the medium term as most professors are approaching retirement age. The English language proficiency of the Faculty body is considered very good. 100% Senior staff The Faculty body is involved in professional development activities such as accounting conferences and seminars, publishing articles, and exchange visits abroad. 1:54 Teacher to student ratio Faculty Profiles 14% Assistant professors 17% 41-50 years 43% 83% Members Age Full time 51-60 years professors 43% Associate professors Qualifications 43% 57% PhD Gender 66% Master 63 Student Body Student demand for the accounting program is high and there has been an increase in the trend for accountancy education. The link with the corporate sector is good with students and businesses provided with ample opportunities to interact. A significant number of graduates (around 48 percent) find employment in the financial sector. 30% The demand for accounting education has increased by 10 percent annually, with approximately 30 percent of all students choosing to study the Accounting bachelor Students choose program. accounting The student drop-out rate is approximately 18 percent. programs On average, it takes six years to complete a degree. The employment rate six months after graduation is 10% 70 percent. Sixty percent of all Accounting program graduates work in accounting and auditing related fields. Annual increase Students’ English language proficiency is assessed as in demand for very good. accounting programs Linkages with the business sector 70% The Faculty engages actively with local accountancy Students find firms, the business community, and with Professional employment Accountancy Organizations. Opportunities for students within 6 months of to interact with the cooperate world are also provided via career days, forums and corporate representation. graduation Student Profiles Gender 58% Graduates employment per sector Business community Accounting and auditing profession Government and not-for-profit 48% Financial 12% 15% 25% sector 64 Benchmarking Results The accounting program scores relatively well at the undergraduate and master’s level against the benchmarks. The program could benefit from a greater focus on Ethics and Commitment to Public Interest to improve alignment with the IES benchmark. Also, improvements in Performance Management, Business and Organizational Environment, and Economics courses would improve comparability with both the ACCA program and IESs. Syllabus Profile against IES Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 65 Syllabus Profile against ACCA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Accountant in Business Audit and Assurance Financial Accounting Financial Management Financial Reporting Management Accounting Performance Management 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Syllabus Profile against CIPFA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Financial Accounting Management Accounting Managing Finance Managing Organizations Public Sector Financial Reporting 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 66 The Association of Accountants and Auditors of Republic Srpska (AAARS) About the AAARS The AAARS has been an IFAC member body since 2010. Most members are Certified Accountants and Certified Accounting Technicians. The AAARS has a modest budget per member, with the majority of funding sourced from CPD programs. Member Profiles The AAARS was founded in 1996 as a not-for-profit Gender organization, composed of 11 territorially distributed associations of accountants and auditors. According 75% to the law, the AAARS has the delegated authority to perform the following activities: organize professional 1% examination programs for certification of accountants Certified Forensic Accountants and statutory auditors; deliver CPD and training; conduct quality control over member firms and 3% practitioners; and issue certificates for membership Certified Auditors and practicing licenses for Certified Accountants. 54% Profile Licenses for practicing auditors are issued by the Ministry of Finance. 42% Certified Accounting Accountants The AAARS became a member of IFAC in 2010 and a Technicians member of the European Federation of Accountants (FEE) in 2015. Members Funding The AAARS has over 3,470 active members, the majority of whom are Certified Accountants and 13% 43% Accounting Technicians. Qualification programs Resources CPD The AAARS does not have a formal strategic plan and all focus areas are defined in the AAARS Statute. 27% programs 17% The available budget is about EUR 220 per active Seminars, Membership, licencing member. fees, and other sources conferences & publications €200 Approximate annual budget per member 67 Governance The Education Committee is responsible for conducting the professional education program for accountants The AAARS Assembly is the ultimate governing and auditors. It works under the guidance and program body, composed of 32 elected representatives of developed by the Council for practical education the members. The Supervisory Board comprises five composed of university professors. members while the Board of Directors consists of seven members including the President. There is also Governance Bodies a Court of Justice composed of six members. 89% Gender The President of the Board of Directors and the Executive Secretary are responsible for the management of AAARS. The President represents of Board of Directors members are male the PAO and chairs the Board of Directors, while the Executive Secretary is the administrator and manages AAARS operations. Staff The majority of the governance structures of AAARS AAARS has five full-time employees: two work are composed of men, and eight of the nine members on activities connected with the education and of the Board of Directors are male. Practicing members examination processes, one works on Quality dominate the governance bodies. Assurance and two provide administrative support. There are 63 outsourced functions, the majority of which are involved in education and training activities. Education and Training Program The education program follows a progression model with exit points at three levels based on an individual’s career choice. Although practical experience requirements are in place, the program could be enhanced by prescribing learning outcomes and competencies for professional skills and professional values, ethics and attitudes. Entry requirements •• A uthorized Auditor: applicants must complete the Certified Accountant exams and have three years of The AAARS offers three accountancy designations: practical experience before entering the education Certified Accounting Technician, Certified Accountant program. and Authorized Auditor. The education entry requirements for each designation are: Demand The demand for participation in the certification •• C ertified Accounting Technician (CAT): high school program has remained stable and high. There are diploma. around 500 admissions to the professional program •• C ertified Accountant: completed CAT designation every year, with the majority (around 78 percent) or university degree (240 ECTS credits), or higher enrolling in the Certified Accountant stream. education degree (180 ECTS credits) or college education (120 ECTS credits). 68 Content In order to progress to the Authorized Auditor level, all Certified Accountant exams need to be completed. The table below provides an overview of the examinations in each module: Professional Education Certified Accounting Technician Certified Accountant Authorized Auditor Introduction to Financial Accounting Commercial Law and Taxation Advanced Management Accounting Cost and Management Accounting Management Accounting Advanced Auditing Applications Management and Communications Financial Reporting Advanced Financial Reporting Information Technologies and Auditing and Internal Controls Advanced Financial Management Applications Financial Management Applications Strategic Management Curriculum updates and reviews •• Authorized Auditor: three years of practical experience obtained after completing the Certified The program is periodically updated, with the last Accountant designation. revisions having taken place in 2011. A more regular and structured process for curricula updates and reviews The input approach is used to measure practical needs to be implemented. experience. In order to verify the practical experience, the employer provides a signed certificate. The certificate is signed off by the supervisor and the Examinations Certified Accountant or Authorized Auditor. Exams are conducted twice a year (in May and November). The average number of candidates in one All Certified Accountants and Authorized Auditors are examination session is about 360 and the average pass eligible to act as approved employers for relevant rate over the past three years has been 65 percent. practical experience. The practical experience On average, 80 candidates successfully complete the supervisor is not obliged to perform any evaluation of education program for all designations every year. professional skills acquired in the workplace, nor are the candidates required to maintain and complete a record or other form of documentation demonstrating Practical experience the achievement of professional skills. requirements Learning outcomes for professional skills and professional values, ethics and attitudes are not Upon successful completion of the education program, formally prescribed by the AAARS. Some of the a candidate must achieve the following practical required learning outcomes relating to professional experience: skills and professional values, ethics and attitudes are •• Accounting Technician: between two and three achieved within the education program and through years of practical experience depending on the the practical experience requirement. However, these level of specialization of its high school education. outcomes are not formulated in a narrative style and The requirement relates to performing accounting documented. duties and being involved in preparing financial statements. •• Certified Accountant: between two and four years Practice license of practical experience, depending on the type Upon successful completion of the examination program of bachelor degree. The requirement relates to and the practical experience, Authorized Auditors can performing accounting duties and being involved in approach the Ministry for Finance to obtain a practice preparing financial statements. license, while Certified Accountants are licensed by the AAARS. 69 Recognition Certificates issued by another professional organization in Bosnia are recognized by the AAARS. Candidates certified with other regional bodies which have signed recognition agreements with the AAARS, including the Serbian Association of Accountants and Auditors (SAAA) and the Institute of Certified Accountants of Montenegro (ICAM), are eligible to receive recognition of their qualifications. Continuing Professional Development (CPD) The CPD requirement for Certified Auditors is prescribed by law and AAARS has introduced equivalent requirements for all members. Requirements Finance – as the licensing authority – requires proof that 120 hours of CPD have been completed within The CPD requirement is determined by law and a three- year period. Names of members in breach consists of 120 hours of admissible CPD units for of CPD requirement are published as a means of Certified Auditors. These units need to be achieved encouraging compliance. within a three-year period. The AAARS has imposed such a requirement for all members (CAT, Certified Accountants and Authorized Auditors), and has further CPD Program specified that at least 20 verifiable hours of CPD need to be completed annually. The CPD requirements and The development of the CPD program starts with benefits are communicated regularly to members, via the Council for Practical Education, which comprises website, newsletter, bulletins, and magazine. university professors. Together, they determine the scope of CPD while the Committee for Education The CPD activities recognize a variety of admissible develops the program content. CPD courses organized units, including verifiable and non-verifiable methods. by the AAARS are usually lectures with large audiences, often numbering around 1,000. In order to deliver CPD, the AAARS engages outsourced part-time Measurement methods lecturers, practitioners and representatives of relevant The measurement method for completion of CPD is institutions (e.g. university professors, representatives an input-based approach and AAARS is responsible of the tax administration, supreme audit officers, etc.). for monitoring members’ compliance with the CPD The criteria for selecting trainers are not specified requirement. Attendance at CPD courses organized by and a more structured approach is necessary in order the AAARS records CPD attendance for each member to develop a register of CPD trainers who, beside in order to monitor compliance. Provided there is a technical knowledge and professional experience, shortfall, the practicing license of Certified Accountants also have the necessary soft skills to deliver training is not renewed; for Certified Auditors, the Ministry of activities. 70 GOOD PRACTICE BOX Offering a range of relevant admissible CPD activities A good choice of accessible CPD supports members’ ►► Writing articles, papers or books, both compliance with requirements and reinforces the professional or academic (up to 5 hours); importance of maintaining professional competence. ►► Research including reading of professional The AAARS has adopted a variety of ways that literature or journals (up to 8 hours); and members can meet their CPD obligations, allowing members to engage with CPD in ways that suit ►► CPD activity in the form of seminars, courses their learning styles: and workshops organized by regional PAOs with which AAARS has cooperation agreements is ►► Seminars, courses, workshops organized by also admissible. AAARS (at least 20 hours); ►► cademic conferences and workshops (up to 10 A The AAARS CPD policy acknowledges that hours); professional competence can be maintained in a ►► Coaching and mentoring, provided or received variety of ways and that professionals can also learn (up to 7 hours); effectively in less structured environments. There is a good balance between structured/verifiable and ►► Networking (up to 8 hours); unstructured/unverifiable CPD activity. ►► Self-directed and unstructured (up to 5 hours); ►► Delivering and developing CPD courses in relevant areas (up to 7 hours); CPD programs are mainly supply driven. Previous CPD programs were focused primarily on technical CPD Courses competence areas; less importance was given to other skills such as communication and interpersonal skills. Auditing Annual CPD programs include four hours dedicated to the Code of Ethics of the International Ethics 13% standards 69% Standards Board for Accountants® (IESBA®) and its and updates requirements and related guidance. However, more participative approaches to learning and development of professional values, ethics and attitudes remain 9% Taxes and regulatory to be explored. A lack of competence maps and Financial reporting updates frameworks means that members are not trained in and accounting effective communication with team members, client management and governance structures. Mentoring and coaching skills necessary to assist professional 9% Professional Ethics career development of audit personnel have not been addressed by CPD courses. Finally, the CPD program is fairly general and no specialized training activities are developed to satisfy varying members’ specialist needs. 71 Benchmarking Results Improvements in several areas, including Governance, Risk Management and Internal Control, Economics, Business and Organizational Environment, Commitment to Public Interest and Ethics, could result in better alignment with the IES benchmark. There is lower coverage of advanced ACCA papers in the professional program. Syllabus Profile against IES Benchmark Certified Accountant Authorized Auditor SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 0% 20% 40% 60% 80% 100% 72 Syllabus Profile against ACCA Benchmark Certified Accountant Authorized Auditor SUBJECTS Accountant in Business Advanced Audit and Assurance Advanced Financial Management Advanced Performance Management Audit and Assurance Business Analysis Corporate Reporting Financial Accounting Financial Management Financial Reporting Governance, Risk and Ethics Management Accounting Performance Management 0% 20% 40% 60% 80% 100% 73 74 Kosovo at a glance About SCAAK: A member of IFAC since 2009. SCAAK offers qualification programs in both the public and private sector. Education programs University of Pristina, are the primary source of funding. SCAAK cooperates with the Netherlands Institute of Faculty of Economics Chartered Accountants and other regional PAOs. About the Faculty: The Faculty is funded primarily by the state and to a lesser extent by The professional education and training student fees. It has partial autonomy in setting program has been designed based on the the curricula. ACCA curriculum and candidates benefit from a number of exemptions to the ACCA program. SCAAK has established strong relationships The undergraduate accounting program was with higher education institutions in the introduced in 2010 with the assistance of country and attracts a high number of potential a USAID program. Mutual recognition and candidates. exemptions with the local PAO are in place. The program does not require practical experience or internships to graduate. There is informal engagement between the Faculty and local and The CPD requirement for Certified Auditors is regional PAOs. prescribed by law and is subject to monitoring. Certified Accountants and Certified Accounting Technicians complete CPD on a voluntary basis. Demand for accounting education is high, particularly for the master’s program where admissions are higher than for the undergraduate program. Benchmarking results: The professional program’s score is high when benchmarked against IES. There has been good progression Faculty resources: Balanced mix of tenured in proficiency levels between the Certified professors and teaching assistants and Accountant and Certified Auditor qualifications. low teacher-student ratio compared to the university in general. The Society of Certified Accountants Benchmarking results: There could be benefits in improving curricula in Financial Accounting and Auditors of Kosovo (SCAAK) and Reporting, Auditing and Assurance, Ethics, IT and Public Sector Financial Reporting. 75 Key survey facts 2 900 Respondents 4 Students Educational Programs Auditing and Accounting ROSC Update: Main Findings and Recommendations Relating to Accountancy Education Reports on the Observance of Standards and Codes assessment was that there is a need to promote – Accounting and Auditing (ROSC A&A) form part integration between university and professional of a joint World Bank/International Monetary Fund education. initiative to review the quality of implementation of The ROSC A&A also found that further updates internationally-recognized core standards which are and enhancements are required to the quality relevant to economic stability and private sector of tertiary-level accounting education. It also development. A 2012 ROSC A&A update assessed encouraged the Society of Certified Accountants financial reporting and auditing practices in Kosovo. and Auditors of Kosovo (SCAAK) to share its The ROSC A&A update found that there had been resources with the universities and recommended some progress in integrating accounting education that, at a minimum, part of the training program in the universities with professional qualifications. for accounting technicians should be devolved to However, it also noted that more effort was needed universities. in this area. One of the recommendations of this Contacts Nexhmie Vokshi Ardiana Bunjaku University of Pristina, Faculty of The Society of Certified Economics Accountants and Auditors of Kosovo (SCAAK) nexhmie_vokshi@yahoo.com info@scaak.org www.uni-pr.edu www.scaak.org 76 University of Pristina, Faculty of Economics About the Faculty The Faculty of Economics is the largest unit within the University of Pristina and offers degrees at all three levels of education: undergraduate, master’s and doctoral programs. The most significant portion of the funding is from the Government, which contributes 70 percent of the overall budget. The Faculty of Economics is part of the public University Establishing academic partnerships with other of Pristina. It was originally established in 1961 as the institutions are centralized and conducted through the Faculty of Law and Economics. It operated under the Senate Office for International Relations. Faculty of Economics in Belgrade until 1969 when the University of Pristina was established. In 1971, the Faculty of Economics separated from the Faculty of Funding Sources Law and initially the teaching process was conducted 30% simultaneously in both Albanian and Serbian. Since its establishment, approximately 30,000 students 70% have graduated from the Faculty and today it is the Student largest faculty within the University of Pristina. The fees University’s Statute provides the governance and other frameworks for the Faculty’s operation. Government Sources of funding The main source of funding is the Government (70 percent). Student fees account for around 30 percent of the overall budget. Education programs Level of autonomy There are currently six active undergraduate programs Academic polices, financial matters, and capital and offered by the Faculty, of which five are in Albanian operating investments are managed at the University (Banking, Finance and Accounting; Management and Senate (Rectorate) level. The Faculty can initiate new Informatics; Marketing; Economics; and Accounting), programs subject to approval by the University Senate and one is in English (Applied Economics and Business (Rectorate) and the Kosovo Accreditation Agency. The Management). The Faculty currently offers five curricula, type of course as well as the number of master’s programs and five doctoral programs, of hours per academic year are also subject to approval which one (Economics) is offered in English. by the University Senate (Rectorate). 77 All undergraduate programs last for three years (six semesters and 180 ECTS). Master’s programs are for two years (120 ECTS). Both undergraduate and master’s programs comprise compulsory and elective courses. The overall number of students admitted in the Faculty is determined by annual quotas set by the Ministry of Education based on proposals from the Faculty. Accreditation All programs are accredited at the national level. The Accounting Program The Undergraduate Accounting program was established in 2010 with the assistance of a USAID program. There is a mutual recognition system in place with SCAAK (the professional body of accountants and auditors). None of the accounting programs require practical experience or an internship for graduation. Type of degrees Curriculum The Faculty offers an undergraduate degree in The undergraduate program in Accounting is for six Accounting (introduced in 2010 with the assistance of a semesters (180 ECTS credits, 23 mandatory courses USAID Program) and a master’s degree in Finance and and 13 elective courses). The table below shows the Accounting (offered since 2004). A doctoral program core and elective accounting and auditing courses in in Finance and Accounting is also available. There are the program: plans to offer a new master’s program in Accounting in the near future. Undergraduate First Year Second Year Third year Accounting I Financial Accounting Cost Accounting Advanced Accounting Management Accounting I Financial Reporting II Auditing and Control Systems Management Accounting II Financial Statement Analysis Financial Institutions Accounting Public Accounting Tax Accounting Financial Reporting Two elective courses: •• Professional Ethics for Accountants and Auditors •• International Accounting •• Financial Management •• Small Business Accounting 78 The master’s program in Finance and Accounting consists of four semesters (120 ECTS credits, six mandatory courses and three elective courses). The table below shows the accounting and auditing core and elective courses in the master’s program: Master First Year Second Year Advanced Financial Accounting Auditing and Assurance Services Management Accounting II Advanced Corporate Finance Risk Management II Elective course: Elective courses: •• International Finance II •• Advanced Finance •• Accounting for Financial Institutions •• Quantitative Methods in Finance •• Financial Statement Analysis II •• Public Sector Accounting GOOD PRACTICE BOX Building partnerships to modernize university accountancy education In 2008, five students from the University of the partnership with the University of Arizona and Pristina participated in the USAID Transformational assisted by the Society of Certified Auditors and Leadership Program which enabled them to Accountants of Kosovo (SCAAK), devised a modern study for 12 months on the master’s program in accountancy three-year undergraduate accounting Accounting at Arizona State University. This USAID program. The five Kosovo scholars also translated program aims to develop capacity by facilitating six seminal accounting textbooks from English into opportunities for advanced education via university Albanian and remained as full-time lecturers at the scholarships, partnerships, and student and faculty University of Pristina and Prizren. exchanges. By collaborating to transform accountancy education The program conditions included a commitment at the University of Pristina, this partnership by the University of Pristina to retain those between Arizona State University and the University individuals on their return to Kosovo as members of Pristina is helping to prepare the next generation of the Accounting Department. After returning to of accountants. Kosovo in 2009, these individuals, supported by Linkages to professional •• T he Society of Certified Accountants and Auditors of Kosovo (SCAAK) signed a Memorandum of qualification Understanding (MOU) with the Faculty. This MOU is The following exemptions are available for graduates: the basis for a mutual recognition protocol according to which all accounting graduates are exempt from •• For graduates of the bachelor or master’s degree the Accounting Technician Qualification papers. in both Accounting and Finance and Accounting, the ACCA offers exemption from four foundation papers in: Accountant in Business, Management Accounting, Financial Accounting and Corporate and Business Law. 79 Practical experience Teaching materials None of the programs (undergraduate, master’s or PhD The quality and availability of materials can be improved programs) require practical experience or internships for certain subjects (Auditing, Advanced Accounting, to graduate. Corporate Governance and Ethics). The Faculty body considers that textbooks are quite affordable, while the cost for manuals is deemed to be unaffordable. Curriculum updates and reviews Further, there are insufficient computer stations at the Faculty, especially stations with internet access. Updates to curricula are usually performed in three- There is modest use of English language materials, year cycles when all programs are subject to re- mainly as supplementary materials. The university accreditation by the National Accreditation Agency. The library is equipped with Albanian translations of IFRS Faculty is currently preparing a new master’s program Standards, the SMEs Standard, ISA and the Code of in Accounting which is expected to be available in the Ethics. However, no English versions are available. near future, subject to receiving national accreditation. IT technologies are used modestly in the teaching process and mainly to communicate with students. Program evaluations PowerPoint and other visual presentations are used The quality of academic and administrative activities predominantly during course lectures. Teaching is assessed by gathering data through three types methodologies incorporate short case studies, in-class of evaluation instruments: a questionnaire for exercises, group and individual project assignments. academic staff; a questionnaire for administrative staff; and questionnaire for students. Each course in the undergraduate program is evaluated through Assessment methods analysis of the feedback from the questionnaires. In The assessment methodology is prescribed by the addition, individual professors are assessed on an University Statute and consists of written and/or oral annual basis based on the professional development examinations, mid-term examinations, seminar papers, activities, number of articles published in journals with professional practice and practical testing. For most international review, and participation in scientific courses the assessment is based on written exams conferences locally and internationally. Data on pass conducted at the end of the semester. All exams (final rates, mid-term exams and duration of studies is also and interim) are written, comprising a combination analyzed and evaluated during these assessments. of short exercises, case studies or open-ended questions. Interim tests account for about 30 percent of the overall grade and final tests for 50 percent of the overall course grade. Other in-class activities score up to 20 percent toward the overall grade. GOOD PRACTICE BOX High student retention rates Kosovo is Europe’s youngest country in terms of master’s degrees, on average, in relatively short demographics – the average age of the population periods: the average time required to complete the is about 26 years, with about 38 percent of the master’s degree in Finance and Accounting is three total population under the age of 19. However, and a half years, while students take an average youth unemployment rates are high and 30 percent of three years and eight months to complete the of youth have no job, education, or training. One Accountancy undergraduate program. of the country’s priorities is to improve the quality Higher quality education is expected to provide and relevance of the education system at all levels. greater opportunities for youth to acquire the In this respect, it is encouraging that student skills that private sector employers are seeking drop-out rates for the entire Faculty of Economics in order to create a young and competent work are quite low at about 1.5 percent. Furthermore, force that can help attract investment and increase students complete Accountancy undergraduate and employment opportunities. 80 Faculty Body Balanced mix of qualified tenured professors and teaching assistants and a low teacher-student ratio compared to the university as a whole. The teaching norm is 180 hours per academic year 13 six hours per week) for professors and 300 hours per academic year (10 hours per week) for teaching assistants. Faculty The teacher-student ratio of 50 students per professor members is significantly below the average ratio for the entire Faculty which is about 150 students per teaching staff. Professors’ salaries are sufficient to retain current members of the Faculty and attract new members. Three Faculty members hold a local professional 54% certification from SCAAK (two hold the designation Senior staff of Certified Accountant and one has the designation Certified Auditor). The English language proficiency of the Faculty body is considered good. The Faculty body is involved in professional development activities such as participating in 1:50 accounting conferences and seminars and publishing Teacher to books and articles in accredited journals. Additional student ratio efforts are required to engage in exchange visits abroad. Faculty Profiles 8% Full time professors 15% < 30 years 23% Assistant professors 46% 31% Members Age 23% Teaching 41-50 years 31-40 years assistants 31% 23% 51-60 years Associate professors Qualifications 46% Master 54% 62% Gender PhD 81 Student Body One in ten students choose the Accounting program. The number of students admitted to the Master’s Finance and Accounting program exceeds the undergraduate admissions. The Faculty has limited interaction with the corporate world, maintained through informal cooperation with professionals and the business community. 1 in 10 The demand for accounting education at the Accountancy program has remained stable and high over the past few years. It is estimated that about Students choose 10 percent of all students of the Faculty choose the Accountancy undergraduate program. Around 150 accounting students per academic year are admitted to the programs undergraduate accounting program, while 200 students are admitted to the master’s in Finance and Accounting. Students’ proficiency in English is assessed as quite good. 3.5 years Average time to The average number of years required to complete complete Master’s the master’s in Finance and the Accountancy degree program is 3.5 years, while students take on average three years and eight months to complete the accounting undergraduate program. Student drop-out rates for the entire Faculty are about 1.5 percent. 30% Students find employment at Linkages with the business sector graduation The Faculty has some engagement with the business community, local and international auditing companies and PAOs. The cooperation is informal and between individual professors. There is very little interaction Student Profiles between the Faculty and the corporate sector. The Faculty has not developed a tracking system to record alumni employment. It is estimated that 25% between 25 and 30 percent of graduates take up 40% Graduates employment per sector accounting and audit related positions. Further, it is Financial sector estimated that between 20 and 30 percent of students find employment upon graduation. Business community 10% Government and not-for-profit 25% Gender 60% Accounting and auditing profession 82 Benchmarking Results There is low coverage of Public Sector Financial Reporting in both the undergraduate and master’s programs. Compared to the IES and ACCA benchmarks, strengthening the curricula in Financial Accounting and Reporting, Financial Management, Auditing and Assurance, Commitment to Public Interest, Ethics and IT could result in higher benchmarking scores. Syllabus Profile against IES Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 83 Syllabus Profile against ACCA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Accountant in Business Audit and Assurance Financial Accounting Financial Management Financial Reporting Management Accounting Performance Management 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Syllabus Profile against CIPFA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Financial Accounting Management Accounting Managing Finance Managing Organizations Public Sector Financial Reporting 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 84 The Society of Certified Accountants and Auditors of Kosovo (SCAAK) About SCAAK SCAAK is a modern PAO with a clear mission to serve the public interest. Beside its private sector certifications, SCAAK has also developed a public sector stream to build the capacity of accountants in their public sector roles. Income from qualification programs is the most significant part of SCAAK’s budget as well as an important funding source. SCAAK was founded in May 2001 by a group of 14 Institute of Chartered Accountants (NBA) under which professionals (including international advisors) as a considerable guidance has been received, mainly in not-for-profit, nongovernmental organization. SCAAK’s the area of developing a quality assurance system. mission is to serve the public interest by establishing With the support of the international donor community, and enforcing standards that ensure qualified SCAAK has evolved into a modern professional body. professionals in accounting, financial reporting, SCAAK cooperates closely with the Institute of auditing, and financial management fields. Authorized Chartered Auditors of Albania (IEKA), SCAAK became an associate member of IFAC in 2003, especially in terms of using common resources to proceeding to full membership in 2009. A Twinning translate IFAC materials and guides and to organize Arrangement is in place with the Netherlands joint CPD training sessions. The Profession The accounting and auditing essence, the KFRC is composed of: (i) a Board of profession in Kosovo is regulated seven experts including representatives from the by the Law on Accounting, Financial Central Bank, universities, Ministry of Finance and Reporting and Auditing. The Kosovo Financial PAOs headed by a Chairman; and (ii) a Secretariat Reporting Council (KFRC) acts as a regulator of seven staff within the Ministry of Finance who and has been assigned a wide range of duties support the Board of Experts. by the Law (i.e. the KFRC is designated as the Two professional bodies have been approved by standard-setter for accounting, auditing, ethics and the KFRC as eligible to provide initial professional professional audit education, as well as regulator, development for auditors: The Society of Certified and enforcer). Organizationally, the KFRC has Accountants and Auditors of Kosovo (one of the no financial autonomy and is effectively part of oldest and well recognized bodies in the region with the Ministry of Finance. Its main funding source a vast membership representing different sectors is the Kosovo budget, supplemented by a small and institutions in Kosovo) and the recently formed income which is raised through licensing fees. In IKAF – Instituti per Kontabilitet Auditium Financa. 85 Members SCAAK represents 1,060 active members engaged in different sectors. Its members are from key Institutions in Kosovo, including the Central Bank, Supreme Audit Institution, not-for-profit and government sector as well as the business community and accountancy profession. Member Profiles 3% Not-for-profit organization 14% 26% Financial industry < 30 years 43% Age 37% Profile 16% 31% 41-50 years Public practice Public sector 31-40 years 30% Business sector 27% Designation Certified Auditors 45% Accounting Gender 63% 28% Professional Tehnicians Accountants Resources Qualification programs are the main source of income for SCAAK and there is a low dependency on Funding membership fees in the overall budget structure. The annual budget is approximately EUR 500 per member. 22% 70% SCAAK monitors performance by analyzing several key financial ratios and also evaluates the market demand Membership through the number and percentage of new students fees for each training and certification program offered. Qualification SCAAK’s strategic plan includes several objectives: programs (i) increasing the reputation of private sector professionals by cooperating closely with higher education institutions; (ii) developing a sustainable 8% system of Quality Assurance; (iii) building the capacity Other of professionals in the public sector at the national €500 and regional level; and (iv) offering specialized training Approximate annual in areas of relevance to the accounting and audit budget per member profession, particularly the establishment of an internal audit certification and training program. 86 Governance Governance Bodies The Assembly of Members is SCAAK’s ultimate governing body, which elects Council members at its Gender annual meetings. The Council is composed of seven 80% members who are volunteers, with the primary role of overseeing the work of the Executive office. The Council is responsible for developing by-laws and operating regulations, electing SCAAK’s President and Vice-President, appointing committee members, 71% of Council members are male and electing the Executive Director. Council members cannot exceed two consecutive terms in office of two Staff years each. Two of the seven Council members are SCAAK’s Executive Office has 14 full-time employees: female and three are practitioners. one Executive Director, one Deputy Director, three staff working on education and examination duties, SCAAK’s committees have been established to cover one dealing with Quality Control and Assurance and relevant areas and tasks as determined in SCAAK eight providing administrative support. About 20 part- annual and strategic plans, according to existing work time consultants, most of whom are contracted as plans for each committee. There are currently seven lecturers and examiners, support SCAAK’s operations. committees: (i) Nomination Committee; (ii) Disciplinary The majority of the 14 full-time staff are female (9 out Committee; (iii) Professional Standards Committee; of 14). The Executive Office is led by the Executive (iv) Quality Assurance Committee; (v) Professional Director who reports to the Council. The Executive Education Committee; (vi) Tax Sub-Committee; and (vii) Director’s primary responsibility is to implement Insolvency Sub-Committee. Non-practicing members SCAAK’s strategic plan, organize the training programs, dominate the committees, except for the Professional maintain relationships with existing and prospective Standards Committee in which practitioners comprise donors, liaise with the media, and implement decisions, the majority. by-laws, regulations, etc. The Executive Office is functionally divided into the following five departments: (i) Department of Education and Professional Standards; (ii) Quality Assurance Department; (iii) Finance Department; (iv) Department of Legal and Procurement Matters; and (v) Department of Administration and Human Resources. GOOD PRACTICE BOX Being responsive to the different needs of professional accountants One of the strategic goals of SCAAK is to offer in Finance in Slovenia and developed by the programs tailored to specific market needs and UK Chartered Institute for Public Finance and institutions in Kosovo in order to build and increase Accountancy (CIPFA); capacity in all areas related to financial reporting ►► nsolvency Specialist Certification Program, a I and auditing. After establishing the private sector program developed with the assistance of an certification, SCAAK engaged in the development EU funded project between 2009 and 2011. of new certification programs including: ►► P ublic Sector Certification Program, a Furthermore, it is expected that a new Internal professional title made possible through shared Audit certification program which is currently under implementation with the Center for Excellence development will be offered from late 2017. 87 Education and Training Program SCAAK’s professional education and training program is based on the ACCA’s program, with successful candidates offered a high level of exemptions. SCAAK has a well-developed career development strategy in order to attract high caliber candidates to the profession, and also cooperates closely with higher education institutions in the country. Entry requirements Demand SCAAK offers three designations for accountants in The demand for participation in the certification the private sector. Each designation has the following program has remained stable and high over recent entry requirements: years: on average, there are between 15-20 new applicants for the Certified Auditor designation every •• The Certified Accounting Technician (CAT) year, of which about 10 complete the program. There designation has the same entry requirements as are between 100 and 130 new admissions to the universities and is available to all candidates with a Certified Accountant designation, with 20 completing high school diploma; the program each year. There are also between 350 •• The Certified Accountant designation is available and 400 new CAT admissions annually, of which 90 to candidates who have a university degree in complete the program. economics or business related fields as well as candidates who have successfully completed the CAT designation; Content •• Certified Auditor designation entry requirements The current education program is based on the are prescribed by law and candidates must have a ACCA examination structure. SCAAK has signed university degree in economics or business-related an agreement with BPP Professional Education in fields. the UK, one of the leading providers of professional accounting and auditing education materials in Europe, The entry requirements are not considered excessive for the use and translation of its training materials. and allow candidates to enter the programs with a These examination materials are well established and reasonable chance of completion. include learning outcomes, examination methodology and related competences. The education modules follow a progression model with exit points at three levels, based on an individual’s career choice. In order to progress to the Certified Auditor level, all Certified Accountant exams need to be completed. Professional Education Certified Accounting Technician Certified Accountant Certified Auditor Financial Accounting Financial Reporting Advanced Financial Reporting Cost and Management Accounting Auditing Advanced Auditing and Assurance Accountant in Business Financial Management Business Analysis Kosovo Tax and Law Management Accounting Professional Practice Applications 88 GOOD PRACTICE BOX High quality and up to date teaching materials SCAAK’s teaching materials and textbooks are Professional Education in the UK, for the use well established and include learning outcomes, and translation of its training materials. These examination methodology and related competences. materials are refreshed on an annual basis to Each textbook is accompanied with exercise kits ensure that they are up to date with changes in and mock exams simulating examination condition accounting and auditing developments. problems, designed for candidate practicing ►► SCAAK collaborates with professional audit and purposes. The study materials are kept up to date accountancy firms on aspects relating to updates and are refreshed on an annual basis. of the syllabus content in areas such as tax and SCAAK has implemented a few good practices to law in Kosovo. Necessary changes are made to maintain the high quality of its teaching materials: the education program and teaching materials are updated on an annual basis. ►► SCAAK has entered into an agreement with BPP The general content of the professional examination problems. All questions are mandatory. SCAAK has program is published on the SCAAK website, including implemented detailed procedures for examination information about programs, examination methodology, preparation and marking. Appropriate controls are previous exams and pass rates. Classroom training embedded in the process to ensure quality and sessions for candidates are available and are delivered confidentiality (e.g. procedures are in place for by a pool of internal and external trainers. training exam markers, auditing the quality of the marking process, re-marking examinations, selection of examination questions and approval of the Curriculum updates and reviews examinations, appeals, etc.) BPP Professional Education provides annual updates In 2015, the average pass rate for all exams ranged to the materials, which are incorporated into SCAAK’s between 30 and 40 percent. On average, candidates curricula. The Kosovo Tax and Law examination is the require two or three sittings to successfully pass each only exam that is not supported by BPP Professional exam. Education training materials. These materials are reviewed annually and necessary regulatory updates are incorporated into the education program and Practical experience teaching materials. requirements A combination of an input- and output-based approach Examinations is used to assess practical experience. There are no preconditions for any professional experience upon Candidates are assessed via three-hour written entering SCAAK education programs. Upon successful examination papers, for which the pass mark is 50 completion of the education program and passing the percent. Examination questions for most exams are exams, a candidate must also obtain the following: based on four or five case studies and real world 89 •• At least one year of relevant accounting experience practical experience in formal records which are for the CAT designation; signed off by their supervisors. The SCAAK Members’ Department may request additional documents from •• Three years of relevant verifiable accounting candidates, such as employment contracts or job experience for the Certified Accountant designation descriptions. It is also entitled to audit the information within the last five years; and provided for accuracy by contacting the supervisor •• Three years of relevant verifiable accounting and directly. The verifying supervisor must support auditing experience for the Certified Auditor candidates’ individual development in the workplace designation, of which 600 hours in the last 12 and review their progress. Currently, only Certified months must be in audit and assurance and must Auditors and Accountants and members of SCAAK or be confirmed by a Certified Auditor. Practical other IFAC member bodies can act as supervisors. experience gained during the Certified Accountant However, plans are in place to implement an approved stage is recognized for the Certified Auditor stage employer scheme. and practical experience can be obtained pre- or post- examinations. Practice license The current practical experience requirement is derived Upon successful completion of the examination from a competence-based approach. For a Certified program and the practical experience requirements, Auditor, this consists of eleven key competences from the successful candidate can approach the KFRC and eight areas that need to be verified by a supervisor. apply for an audit license. This is normally granted upon For a Certified Accountant, there are eight key provision of proof of professional indemnity insurance competences from seven areas which also need to and payment of the licensing fees. be verified by a supervisor. Members document their GOOD PRACTICE BOX Promoting the important public interest role of the accountancy profession SCAAK undertakes a number of activities to promote and delivering presentations to their students on the importance of the profession in protecting the the importance of professional specialization in public interest. It does so by bringing together the accounting and auditing. business community and government stakeholders and engaging in various promotional and public SCAAK celebrated its 15th anniversary in June 2016 relations activities, including: with a forum on “Professional Specialization – ►► Participating actively as a member of various Essential for Economic Development”. The forum chambers of commerce; successfully brought together policymakers, institutions, academia, the profession, the ►► Serving as a member in the Business Community workforce and businesses to discuss the needs Office established by the President of the and best ways to create adequate professional Assembly of the Republic of Kosovo; training curricula in accordance with labor market ►► Acting as a consultant for the General Director needs. The event also raised awareness among the of the Tax Administration of Kosovo; and general public regarding the role of accountants and ►► Cooperating with public and private universities the importance of using accountancy professionals in all sectors of the economy. 90 GOOD PRACTICE BOX Implementing security, timeliness and quality control procedures during examination marking The process of examination marking is critical to ►► SCAAK’s Professional Department audits the ensure fairness toward aspiring candidates. SCAAK marking process to ensure that marks have has implemented a number of security, timeliness been awarded according to the marking guide. and quality control processes to ensure that good This department relies on statistical reports to practices are implemented during examinations: determine scripts subject to audit (e.g. reports on the distribution of marks; comparison of ►► All examinations are marked at one location – average marks; and a comparison of the marks SCAAK’s offices – in order to achieve greater awarded for a particular question by one marker control and security over the process; to those awarded by other markers for the ►► The authors of the examination questions same question, etc.); prepare a marking guide that is reviewed by ►► Papers may be remarked as part of the audit staff of the SCAAK Professional Department. process. All marginal papers are automatically This review is an important step in the process re-marked. If there is a discrepancy, the paper because it independently evaluates the fairness is marked by a third marker or it is reviewed by of the author’s expectations of the candidates; the marking supervisor or another senior-level ►► SCAAK’s Professional Department is responsible person; for selecting exam markers who are sufficiently ►► SCAAK’s Executive Director approves the marks independent as well as knowledgeable about after reviewing relevant reports and statistical matters covered by the examination. Before the data on the current and past examinations; and actual marking begins, the selected markers are provided with adequate training; ►► Markers prepare a report on the examination papers marked, no later than five days after ►► The identity of candidates should not become the publication of the examination results via known to the markers. Should a candidate SCAAK’s web page. This report aims to provide identify himself/herself in any way in the paper candidates with a general overview of their (i.e. by first or last name), the paper is forwarded performance and serves as guidance to new to the Professional Department which has the candidates who are sitting the examination for authority to stop further marking; the first time. 91 GOOD PRACTICE BOX Providing tools and guidance to meet practical experience and professional skills requirements In order to encourage and guide students to develop ►► In a profession which is still considered “new” in relevant skills and competencies in the workplace Kosovo, selecting an appropriate supervisor can that will equip them for a successful career as a be challenging due to the size of the profession professional in accounting and related areas, SCAAK and because the supervisor’s role is not always has developed several resources and guides. These understood. SCAAK’s guidance is also used include: as a tool for supervisors to understand the requirements when signing off on a candidate’s ►► SCAAK’s practical experience and skills policy, competencies; and which is a comprehensive document that candidates and students are required to use ►► Practical experience forms and templates are while documenting their work and to match provided to help candidates document the such work with the competencies determined practical experience that they have attained. in SCAAK’s policy. The policy provides details regarding the practical experience requirement SCAAK is presently developing requirements for an and also elaborates on the professional skills approved employer’s scheme. This process is to be that successful candidates should have attained launched soon through a new practical experience by completion, including technical, leadership and guidance policy. general managerial skills; Recognition SCAAK also concluded a Memorandum of Understanding with IEKA Albania for mutual recognition Candidates qualified under an education scheme of qualifications. of another IFAC member body may have their qualifications recognized if they successfully pass the Further, SCAAK has a mutual system of recognition tax and business law exams. with CIPFA for the public sector designation: ACCA offers the following exemptions: •• xisting SCAAK Certified Auditors with five years E or more post-qualification experience in the public •• CAT holders are exempt from the paper in sector in Kosovo are offered full CIPFA membership Financial Accounting, Management Accounting and and are exempt from all CIPFA exams. Accountant in Business; •• uccessful candidates who undergo the SCAAK- S •• Certified Accountants receive exemptions from CIPFA jointly accredited public finance management papers in Financial Accounting, Management qualification will be exempted from all CIPFA Accounting, Accountant in Business and Financial courses and will receive full CIPFA membership Management; and upon completion of at least three years of relevant •• Certified Auditors receive exemptions from papers practical experience. in Financial Accounting, Management Accounting, Accountant in Business, Financial Reporting, Audit and Assurance and Financial Management. 92 Continuing Professional Development (CPD) CPD obligations for Certified Auditors are prescribed by law and are monitored by the Kosovo Financial Reporting Council (KFRC). There are voluntary CPD requirements for Certified Accountants and CATs. Although SCAAK often reminds members of their CPD obligations as well as the importance of CPD, stronger monitoring and non-compliance measures should be implemented. Requirements The average number of attendees for each CPD event organized by SCAAK is around 100-150 SCAAK The CPD requirement for statutory auditors is members. There are between six and seven annual mandatory and set in law. The KFRC is responsible for CPD events. supervising the system for CPD and only professional bodies licensed by the KFRC are allowed to provide SCAAK communicates the importance of CPD to CPD training for their members. SCAAK has put in members through webpage notices which are place the following voluntary CPD requirements: disseminated to members. SCAAK also promotes CPD opportunities through its membership with Business •• or Certified Auditors: 120 hours of CPD training F support organizations. each rolling three-year period (of which 78 must be verifiable), and minimum 40 hours of CPD training per year (of which 24 hours must be verifiable). Measurement methods •• F or Certified Accountants: minimum 40 hours of CPD is measured using an input-based approach. CPD training per year (of which 18 hours must be SCAAK keeps a log for each member to record and verifiable). track CPD hours. Statutory auditors need to file a statement signed by SCAAK with the KFRC to confirm The following development activities are considered that the annual CPD requirement has been met, eligible CPD units: detailing the number of CPD hours achieved and listing •• Verifiable CPD: seminars and courses organized the CPD topics. If such a statement is not provided, by SCAAK, IFAC member bodies and other then a Statutory Auditor’s license will not be extended. internationally recognized accountancy training Since CPD requirements for Certified Accountants are providers. voluntary, non-compliance is not sanctioned by SCAAK. •• Non-verifiable CPD: attending academic conferences, With IES 8 coming into force in July 2016, output-based formal education (master’s, PhD, specialization, and measurement systems for CPD for Statutory Auditors other relevant professional qualifications), practical will need to be put in place. This will require that audit experience in a new professional role, coaching and partners demonstrate the achievement of the learning mentoring, networking, developing and delivering objectives required by the revised IES 8. CPD in relevant areas, writing articles, research and publishing books. 93 CPD program There is no separate CPD stream for Certified Auditors. There is sufficient coverage and an equal SCAAK’s Professional Department initiates the division between topics covering financial reporting development of the CPD program content, ensuring requirements (IFRS Standards and the SMEs Standard), that the program covers relevant competence areas auditing standards (ISA and ISQC 1) and taxes and and desired learning outcomes sufficiently. The annual business legislation. Professional ethics is also covered CPD program is also approved by the Education and each year. Professional Standard Committee. Other training courses include some specialized SCAAK is equipped with surveying software to improve industry training (e.g. contract costing for construction communication with its members and identify their companies). However, more efforts are required to professional development needs. CPD feedback is also introduce training on soft skills (coaching, mentoring, collected via this tool and used to develop or enhance leadership, communication skills training) and future CPD offerings. specialized offerings for accountants who operate in Members assess which CPD content is relevant to specialized sectors and industries. them, based on their work and/or specialization. CPD Courses 38% Financial reporting 25% 19% 10% and accounting Taxes and 8% Auditing standards regulatory Professional and updates updates Ethics Other GOOD PRACTICE BOX Maintaining a CPD lecturers’ database SCAAK has a group of internal CPD trainers reputation; and (iii) teaching experience. For ISA with adequate technical and soft skills to deliver CPD courses, SCAAK usually contracts experts CPD training. In addition, a contact database is from international audit firms who have practical maintained of external experts and practitioners as well as teaching experience. The CPD speakers who specialize in different topic and fields, as well are usually the same as those who prepare the CPD as recognized members of academia. content. SCAAK also organizes joint CPD events with IEKA and benefits from sharing experiences The criteria used to select CPD trainers include: and CPD sessions though regional cooperation. (i) relevant work experience; (ii) professional 94 Benchmarking Results The SCAAK education program scores well against the IES benchmark, with a few improvements required in the area of Business and Organizational Environment and Financial Accounting and Reporting to fully meet all learning outcomes. Progression between the Certified Accountant and Certified Auditor qualification in terms of proficiency levels is quite good. Syllabus Profile against IES Benchmark Certified Accountant Certified Auditor SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 0% 20% 40% 60% 80% 100% 95 Syllabus Profile against ACCA Benchmark Certified Accountant Certified Auditor SUBJECTS Accountant in Business Advanced Audit and Assurance Advanced Financial Management Advanced Performance Management Audit and Assurance Business Analysis Corporate Reporting Financial Accounting Financial Management Financial Reporting Governance, Risk and Ethics Management Accounting Performance Management 0% 20% 40% 60% 80% 100% 96 Macedonia FYR at a glance About ICARM: this professional body of auditors has been an IFAC member since 2013. Half of its Ss Cyril and Methodius members are in public practice, and nearly one University in Skopje, Faculty of quarter are engaged as internal auditors in the financial sector. ICARM is predominantly funded Economics-Skopje by membership fees. Other revenue sources are fees from professional qualification and About the Faculty: The Faculty is partly CPD. autonomous and relies primarily on student fees for funding. The Faculty offers a wide range of programs at the undergraduate, The professional education and training master’s and doctoral levels. Its programs are program is based on the ACCA curriculum. nationally accredited. Teaching materials are well developed. However, learning outcomes for professional skills and professional values, ethics and The Accounting program should be reviewed attitudes, are not prescribed. Implementing in shorter review cycles. There are internship a more structured and regular process for and practical experience requirements for updates of the syllabi is necessary. Practical completion of the undergraduate program and experience is met purely based on the length of some exemptions to the ACCA program apply. time employed with an audit firm. Demand for accounting education is stable and CPD requirements are prescribed by law and approximately 20 percent of undergraduates at ICARM is currently the only accredited provider. the University enroll in Accountancy programs; CPD is provided in classroom-based sessions at Master’s programs in Accountancy are also set times during the year. Adopting an output- popular with students. based approach aligned to the requirements of IES 8 is necessary. Faculty resources: Staff at the Faculty are highly qualified and engage with the local profession. There is a high teacher-student ratio and a Benchmarking results: The program achieved high concentration of teaching hours by few high scores compared to IES, particularly professors. Approvals for new staff are not on Auditing and Financial Accounting topics. planned. Introducing more advanced papers with an advanced level of proficiency could align the Benchmarking results: Master’s programs program better with the ACCA benchmark. achieve very high scores when benchmarked against IES. Improvements in financial accounting and reporting and IT learning outcomes would Institute of Certified Auditors of the result in further alignment. Both undergraduate and master’s programs would benefit from Republic of Macedonia (ICARM) additional courses on Public Sector Accounting given the relatively lower scores compared to the CIPFA syllabus. 97 Key survey facts 2 235 Respondents 3 Students Educational Programs Auditing and Accounting ROSC Update: Areas for Consideration Relating to Accountancy Education and Training The 2014 Accounting and Auditing ROSC Update High Education; (ROSC A&A) proposed several areas for further ►► T he Institute of Certified Auditors of the Republic consideration concerning accountancy education of Macedonia (ICARM) and universities should and training, including the following: cooperate in promoting the profession among ►► U niversities need further resources to improve students. ICARM could play a more prominent their curricula and materials, and to update the role in the design of the undergraduate and knowledge of professors. Syllabi incorporate graduate courses proposed by universities all the relevant topics but they fall short in and accredited by the Ministry of Education. providing the necessary materials to familiarize Furthermore, ICARM could collaborate with students with the practical implementation of universities on the design and delivery of CPD the applicable standards; programs; and ►► U niversities need more flexibility to draw on ►► ollaboration between universities and the C additional resources, such as donor-funded business community should be enhanced to projects or twinning projects. Faculties currently create an accounting and auditing workforce seem to be somewhat restrained from initiating to better meet the needs of the market in the such liaisons in a timely manner by the Law on medium- term. Contacts Zorica Bozinovska Lazarevska Tatjana Todorovska Ss Cyril and Methodius Institute of Certified Auditors University in Skopje, Faculty of of the Republic of Macedonia Economics - Skopje (ICARM) zoricab@eccf.ukim.edu.mk gensec@iorrm.org.mk www.eccf.ukim.edu.mk www.iorrm.org.mk 98 Ss Cyril and Methodius University in Skopje, Faculty of Economics-Skopje About the Faculty Student fees are the dominant source of funding, contributing 74 percent of the university’s overall budget. Degrees are provided at undergraduate, master’s and doctoral levels. All programs are accredited at the national level only. The Faculty of Economics is part of the public Ss Cyril and Methodius University in Skopje established in the Funding Sources 1950. The Faculty is the first national higher education institution in the country in the field of Economics and Business. Since its establishment, 58,600 students have 26% 74% joined the Faculty and 20,885 have graduated. The Law on Higher Education and the Statute of the Ss Cyril and Methodius University in Skopje provide the governance Government and other frameworks for operation of the Faculty. and other Student fees Sources of funding Student fees are the main source of funding and contribute 74 percent of the university’s available budget. The University Segment The Higher Education System in the Undergraduate and master’s programs with a country is represented by five public significant accountancy component are offered at and eighteen private universities. several public universities: University Ss Cyril and Public universities dominate the higher education Methodius in Skopje; University Ss Kliment Ohridski; system and provide education to 87 percent of all UGD; Stip; Bitola; and the University of Tetovo. enrolled students in 2014/15. The largest and most dominant university in the country is Ss Cyril and Methodius University in Skopje, which accounts for 43 percent of all enrolled undergraduate students in the country. 99 Level of autonomy Education programs The Faculty is free to design new curricula and There are seven active undergraduate programs: introduce new programs, subject to the approval of (i) Accounting and Audit; (ii) Economics; (iii) Financial the Faculty’s Board for Cooperation with the Public as Management; (iv) International Trade; (v) Management well as the State Board for Accreditation and Evaluation (all established in 1998); (vi) Marketing (established of Higher Education. The number of teaching hours per during 1992) and (vii) E-business (introduced in 2002). program is defined according to the Law on Higher The Faculty also has 11 master’s programs, most of Education. The assessment methodology is decided by which were introduced between 2002 and 2008. The the Faculty, consistently applied across all courses, and oldest program in Marketing was established in 1972. provides for oral and written examination formats as There are four active doctoral programs, which were defined by the regulation. The Faculty is independent in all introduced in 2012. establishing academic partnerships with other faculties All undergraduate programs last for four years (eight and universities in the country and abroad. If it wishes semesters and 240 ECTS). Master’s programs are to participate in consortia for the purposes of applying of both one and two year durations. Undergraduate for EU-funded projects, approval is needed from the programs consist of compulsory and elective courses. central University Head Office. The composition of master’s programs varies, with The overall number of students admitted to the Faculty some comprising compulsory and elective courses, is determined by annual quotas set by the Ministry of while others only offer core courses. Education and Science and approved by Government Decision. In 2014, the annual student quota was increased from 150 to 210 students and the Accounting Accreditation and Auditing program fulfils approximately 90 percent The country joined the Bologna process in 2003 and of this quota. has been a member of the European Higher Education All candidates with a high school diploma can enroll Area since then. in the undergraduate program and there is no entry All programs are accredited at the national level. The exam. If the number of applicants exceeds the quota, university’s programs are focused on the local market candidates are ranked according to their high school without any strategic ambitions to expand regionally grades and state graduation exam scores. or internationally. There have been no attempts to The master’s program in Accounting and Auditing apply for programs accreditation abroad. University admits approximately 53 students annually and has management views international accreditation as about 13 graduates. costly when taking into consideration the resources that are available. Undergraduate Programs admissions per year graduates per year 196 119 123 118 77 93 87 210 160 90 210 160 160 110 Accounting E-business Economics Financial International Management Marketing and Auditing Management Trade 100 The Accounting Program Annual updates and improvements are incorporated into the syllabus while an overall review of the curricula is performed in 10-year review cycles. The teaching materials are well established for most subjects and could be enhanced by introducing additional practical exercises and case studies. Practitioners are only occasionally involved in the teaching process. Type of degrees The Faculty offers an undergraduate degree in Economics with a specialization in Accounting and a master’s degree in Accounting. A doctoral program was introduced in 2012 which offers a PhD in Organizational Science (Management) with a specialization in Accounting and Auditing. Curriculum The table below shows the core and elective courses in the undergraduate Accounting and Auditing program: Undergraduate First Year Second Year Third year Fourth Year Principles of Financial Accounting Corporate Financial International Financial Reporting Accounting Reporting Cost Accounting Auditing Government Accounting and Accounting for Not-for-Profit Organizations Financial Management Internal Auditing Managerial Accounting Financial Statement Analysis Elective courses: •• Accounting Control Systems; •• Accounting for Banks and Other Financial Institutions; •• Strategic Management Accounting; •• Performance Management. The table below shows the core and elective courses in the master’s Accounting and Auditing program: Master Academic Year External Reporting Elective courses: Auditing •• Financial Management Financial Statements Analysis •• Accounting Information Systems and Technologies Strategic Management Accounting •• Performance Measurement •• Fraud Examination 101 Linkages to professional Program evaluations qualification Each course in the undergraduate program is evaluated through a student satisfaction survey. Students are There are no exemptions for graduates when applying asked to evaluate the quality of the teaching in the to join the professional examination program offered following ways: (i) understandability of materials; (ii) by the PAOs. the professor’s ability to deliver quality lectures; (iii) The ACCA offers exemptions from some basic papers, the professor’s availability for additional consultations; as follows: (iv) the appropriateness of communication, practical exercises and their usefulness; (v) the degree of •• Bachelor or master’s degree in Accounting and difficulty of the examination process; and (vi) the Auditing – students are exempt from the following appropriateness of the exam format and assessment ACCA papers: Accountant in Business, Management methods. The results of the evaluation and the annual Accounting, Financial Accounting and Corporate and assessment report, which are prepared on the basis of Business Law. the survey, are published online. There is no evaluation •• Bachelor or master’s degree in Financial of the teaching process at the master’s level. Management – exemption from ACCA papers in: Accountant in Business, Management Accounting and Financial Accounting. Teaching materials •• Bachelor or master’s degree with concentrations The overall quality of materials is good. However, the in other areas are offered an exemption from the quality and availability of materials for some courses ACCA paper in Accountant in Business only. could be improved. Some textbooks are outdated and others need to be enhanced with supplementary questions and exercise kits in order to make the Practical experience subject matter more understandable for undergraduate The undergraduate program has a requirement for students. Since materials and textbooks are considered an internship of 30 days annually for each of the four to be expensive, the accountancy library materials years of the program. The master’s and PhD programs could be significantly updated and more copies of the do not have any practical experience requirements. materials made available. There is some use of English Involvement of practical experts in the teaching language materials, mainly for case studies, project process is rare and limited to occasional short lectures assignments or in-class exercises. by guest speakers. IT technologies are used by some professors mainly to communicate with students, distribute course Curriculum updates and reviews materials and disseminate announcements. PowerPoint and other visual presentation techniques are used The structure, content and curricula of the predominantly during course lectures. undergraduate and master’s programs were last updated in 2012. Syllabi are updated annually when a need is detected by the coordinator. In the past, overall Assessment methods review of curricula were completed in 10-year cycles. Course assessments are through written examinations: An update is planned for 2016/2017 in order to meet mid-term tests (contributing between 50 and 60 the requirements of the new Law for Higher Education. percent of the overall grade) and final exams. Group project assignments contribute between 20 and 30 percent of the overall grade and in-class assignments and activities account between 10 and 20 percent toward the final grade. 102 Faculty Body The Faculty body is well qualified and engaged in professional development activities. Factors that do not favor a high quality learning environment include a high student to teacher ratio and the lack of sufficient professors and administrative support. The teaching norm ranges between 90 to 270 teaching 5 hours per semester. Actual teaching hours are 270 to 360 annual hours for full-time professors and between 180 and 240 annual hours for assistant professors. High Faculty actual hours compared to the teaching norm result from a lack of sufficient professors. members The teacher-student ratio in the final year of study is 100% quite high (120 students per professor) which is not conducive to achieving a quality learning environment. The Faculty body is of the opinion that the number of Senior staff accounting professors in the department is insufficient and the administrative assistance for teaching staff is inadequate. Professors’ salaries are sufficient to retain current members of faculty and attract new members, however 1:120 no approvals of new Faculty hires are expected. Teacher to student ratio All Faculty members have a doctorate in Accounting. One assistant professor is an ACCA affiliate and two full-time professors have a local (Certified Auditor) qualification. The English language proficiency of the Faculty body is considered average. Faculty Profiles The Faculty body is involved in professional development activities such as delivering accounting conferences 60% Members and seminars as well as publishing books and articles 40% in accredited journals. Additional effort is required to Full time Assistant engage in exchange visits abroad, publish manuals and professors professor be more engaged in attending CPD events. 60% Age 40% Gender 60% 31-40 years 51-60 years 103 Student Body The demand for accounting education has been stable and moderate, with 55 percent of students able to find work within six months of graduation. Accounting students are provided with good opportunities to network with the corporate world. 20% The demand for accounting education remains stable and moderate. The number of students admitted in the 2014 undergraduate accounting program was Students choose 173 students. Master’s accounting programs are also in demand, with 26 students enrolling in 2014. accounting Approximately 20 percent of the Faculty’s students programs choose the Accountancy undergraduate program. Students’ English language proficiency is assessed as good. 25% Students find Student drop-out rates are low and average about 3.5 employment in the percent. public sector 55% The average time required to complete a degree is four years and eight months for all graduates, while for accounting students it is four years and five months. Students find employement Linkages with the business sector within 6 months of graduation The Faculty has an active engagement with local and international audit networks as well as with the Professional Organization of Auditors (ICARM) and the business community. The strategic plan of the Faculty includes several activities to enhance cooperation with Student Profiles the corporate sector including: (i) the development of an alumni network; (ii) partnerships with companies to foster internship programs; (iii) consulting with business 15% 45% Graduates employment per sector professionals when developing new programs and curricula; and (iv) involving professionals (executives, practitioners) more frequently in the teaching process. Financial sector Business community 15% Accounting and auditing profession 25% Gender 73% Government and not-for-profit 104 The Faculty has not yet developed an alumni network •• Macedonian Youth to Business Forum, which is and has poor tracking of its graduates. It is estimated organized jointly with the student organization that over 60 percent of graduates take accounting and AIESEC; audit related positions after graduation. This figure •• Free of charge workshops organized in cooperation rises to 90 percent for master’s program graduates. with the American Chamber of Commerce Around 30 percent of students find employment upon (AmCham) to help students enter the labor market graduation, with 55 percent finding employment within by developing their presentation and communication six months of graduation. skills, team work, and fostering effective job search There are some activities that provide links with the skills, etc.; corporate world, including: •• Workshops, initiated and moderated by students; •• The Faculty Career Center, which acts as a link with •• Promotion of the Program for Young Bankers the business sector. A few events are organized (ProCredit Bank Skopje); and every year with the companies that collaborate with the Faculty (e.g. Open day – every April, First •• Conclusion of bilateral agreements by the Faculty with over 35 companies for student internship Academic Class – official beginning of the academic programs. year, etc.); •• Career days, which are organized jointly with the student organization AIESEC; GOOD PRACTICE BOX Supporting the student learning process and talent recruitment through partnerships The Faculty of Economics, in cooperation with an a public dissemination event. The best performing international accounting firm, is implementing a students are awarded certificates as well as program to develop young potential. The program winning internship and employment opportunities looks at how a business case competition can help with the international accounting firm. The program students learn, make the profession more attractive has been evaluated as a great success both from to multidisciplinary students, and help international the students’ perspective and by the international accountancy practices identify and recruit young accounting firm. Students are provided with a good professionals. The program was launched in 2013 insight into professional accounting practice and and includes a case study scenario competition, develop their initial career skills. The international where accounting, finance and business law accounting firm also benefits from increased good students work in groups to develop a solution to publicity, social responsibility and a more structured simulated professional practice problems. The recruitment process. results of their group work are presented during 105 Benchmarking Results The master’s program with all electives scores 100 percent against the IES benchmark. Scores at both the master’s and undergraduate levels against the CIPFA syllabus could be improved by introducing accruals based accounting topics. Syllabus Profile against IES Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 106 Syllabus Profile against ACCA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Accountant in Business Audit and Assurance Financial Accounting Financial Management Financial Reporting Management Accounting Performance Management 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Syllabus Profile against CIPFA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Financial Accounting Management Accounting Managing Finance Managing Organizations Public Sector Financial Reporting 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 107 Institute of Certified Auditors of the Republic of Macedonia (ICARM) About ICARM ICARM is a professional body of auditors with a mandate provided by law. It has been a member of IFAC since 2013. ICARM has a well-developed system of quality control and professional education. Its main sources of income are membership fees, and fees from qualification programs and CPD. ICARM was founded in May 2006 and has the legal Member Profiles authority to: (i) organize professional education and 1% examination programs for certification of statutory < 30 years auditors; (ii) determine CPD requirements and provide CPD training to its members; (iii) perform quality control 16% over member firms and practitioners; (iv) conduct 61-70 years disciplinary investigations of Statutory Auditors; and 38% Age (v) translate ISA and the IESBA Code of Ethics. 20% 51-60 years ICARM became an associate member of IFAC in 2010 41-50 years and proceeded to full membership in 2013. 25% Members 31-40 years ICARM is a professional body of auditors only. It represents 198 members, 25 audit firms and 13 sole Gender practitioners. Half of the members are engaged in public practice as statutory auditors. A significant 63% number of members (24 percent) are engaged in the financial sector as internal auditors. Resources Funding 21% In the absence of a formal strategic plan, ICARM CPD prepares annual plans that focus on short-term programs activities to be achieved in a 12-month period. A simple Qualification programs 22% 45% and tight budgetary process is implemented to monitor implementation. Membership fees are the main source of income for ICARM and the annual budget is around EUR 760 per member. 12% Membership Given its limited resources, it presents a major fees challenge for ICARM to maintain the quality of the Other sources professional education and examination process, €760 update the syllabus, upgrade the CPD system, and Approximate annual maintain a quality assurance system. budget per member 108 Governance Bodies Governance The Assembly is the ultimate governing body. It is composed of all members and meets at least once a year. The Assembly appoints all other board and committee members and also approves operating 63% Practice 37% plans, financial statements, internal policies and Non Practicing procedures. The Supervisory Board comprises five Practicing members appointed for three year terms with the possibility of consecutive appointments and is charged with overseeing the governance and legality of ICARM’s operations. The Managerial Board is ICARM’s executive body. It is chaired by a President and includes nine Gender 53% members elected for three years, with the possibility of consecutive appointments. Committees comprise five to seven members. There 100% are currently eight committees: (i) Auditing Standard of Managerial Board Committee; (ii) Accounting Standards Committee; members are male (iii) Disciplinary Committee; (iv) Committee for Education, Training and Publications; (v) Examination Oversight Committee; (vi) Examination Committee; Staff (vii) Registration Committee; and (viii) Quality Control ICARM has four full-time employees: the General Committee. Secretary, one Administrative Assistant and two All nine members of the Managerial Board are male Quality Assurance Inspectors. All ICARM staff are practitioners. There is a relatively even representation female. The members of the Committees, Supervisory of the Big 4 companies, international network Board, Management Board, including the President members and local small- and medium-sized practices and Vice President, are paid honorary fees based (SMPs) in ICARM’s governing bodies, including on its on meetings attended. In practice, the President and Management Board. many Committee members are more heavily involved and support ICARM’s operating activities on a non- remuneration basis. The Profession The Accounting and Auditing is the executive arm of the Ministry of Finance, profession is regulated by two retaining ultimate responsibility for the Public distinct laws: The Law on Audit and Oversight System in the country. the Law on Performing Accounting Services. The The 2014 ROSC A&A Update noted that there IPD of auditors as governed by the Law on Audit are considerable overlaps in the professional and is delegated to ICARM. The IPD for accountants, as educational requirements for accountants and per the Law on Performing Accounting Services, auditors. Given the size of the domestic market and is delegated to a body of professional accountants resource constraints, there seem to be potential i.e. the Institute of Accountants and Certified benefits in developing close co-operation between Accountants (IACA). Although it was formed in ICARM and IACA. ICARM’s professional education 2012 with mandatory membership by law for chief and examination infrastructure has already been accountants and accountants in public practice, established; it should therefore collaborate with IACA is yet to develop and implement an education IACA to achieve economies of scale. Merging both program. institutions into one body or merging overlapping The Council for Advancement and Oversight of Audit activities could be another option for the medium- acts as the independent public oversight body and term. 109 GOOD PRACTICE BOX Twinning arrangements and partnerships with developed PAOs In 2010, ICARM and two French professional bodies ►► Cooperation and exchange of experiences and – Compagnie Nationale des Commissaires aux knowledge. Comptes (CNCC) and Conseil Supérieur de l’Ordre des Experts Comptables (CSOEC) – entered into a Partnership and cooperation between these PAOs twinning project designed to support: continues today and ICARM benefits from the ►► ICARM application for IFAC membership; knowledge sharing and expertise provided by the French profession. ►► Development of the quality assurance process and providing assistance with practical coaching/ mentoring of quality assurance reviewers; and Education and Training Program The professional education program syllabi are based on the ACCA syllabus. Most of the study materials are well developed and are supplemented by practical examples and case studies. The examination process is well established with safeguards to enable exam integrity. However, a more structured process is necessary for regular and timely syllabi reviews and updates. Learning outcomes for professional skills, and professional values, ethics and attitudes, are not formally prescribed and the practical experience requirement is met purely based on the length of time spent employed in an audit firm. Entry requirements Demand The entry requirements to the professional education ICARM offers one designation – Auditor. The demand program are prescribed by law and require prospective for participation in the certification program has candidates to have obtained an appropriate higher increased over the past few years and on average education degree (i.e. a four-year bachelor degree there are 40-60 new applicants to the certification of 240 ECTS credits) in the field of Economics, Law program each year and between four and nine or another appropriate Business major. Other entry graduate annually. ICARM has not engaged in the requirements include literacy in Macedonian and not development of promotional materials nor conducted having received any sanctions. many outreach activities to attract new talent to the profession, mainly because its mandate is stipulated by law. 110 Content Curriculum updates and reviews The education program consists of two levels with four The education program has been revised on an ad hoc exams at each level. A candidate must pass all exams basis since it was developed in 2009. Updates took in one level to proceed to the next: place in 2012 and again in 2014 to incorporate ACCA’s revised exam materials for Financial Accounting, Professional Education Financial Reporting, and Auditing 1 and 2. The last update of exam materials for Business Law and Level 1 Level 2 Taxation exam was completed in 2013. Changes in Management Accounting Financial Management national and international professional standards and Financial Accounting Auditing 2 legislation have not yet been reflected in the exam materials. ICARM needs to bring the curricula up to Auditing 1 Financial Reporting date and enhance the quality of the textbooks. Tax and Business Law Corporate Governance and Ethics Examinations The current education program was established All exams are written and conducted in sessions twice in 2009 through the national REPARIS program and a year (in June and December). ICARM examination supported by a team of consultants, including the ACCA practices can be regarded as sound, with appropriate whose internationally recognized practice was used as safeguards for examination objectivity, confidentiality the main benchmark. Thirty-two new candidates have and integrity. Each exam script and candidate is graduated since 2009. Before ICARM was founded in marked independently twice by two experienced 2006, all certification and education was delivered by graders. Any major differences that might occur with the Ministry of Finance. Existing Certified Auditors the marking results are investigated and reconciled. were grandfathered into ICARM’s initial body of The examination process uses a random code for membership upon its establishment in 2006. each candidate’s script to secure anonymity. The Examination Committee reviews the results of the Translated BBP Professional Education learning media grading process and formally informs candidates of books are used as official text books for the following the results. Candidates can request a detailed report ACCA-based ICARM exams: Auditing 1; Auditing and re-assessment of the grading of their script and 2; Financial Accounting; Management Accounting; have the right to file a complaint. The Level 1 exams Financial Management; and Financial Reporting. consist of multiple choice questions or a combination These examination materials are well established and of multiple choice questions and case studies, while include learning outcomes, examination methodology Level 2 exams comprise case study questions. and expected competences. For the remaining Practice exams and sample questions are available exams (Tax and Law and Corporate Governance to candidates. and Ethics) the textbooks are not so well developed and sample questions are used to demonstrate the Exam statistics (i.e. pass rates, list of successful learning outcomes, proficiency levels and examination candidates) are not shared publicly but are reported methodology. ICARM should develop these textbooks to the Management Board and exchanged with the further and enhance materials with learning outcomes. Oversight Body. Overall pass rates are about 56 percent. Additional supporting guidance should be Due to the lack of student interest, ICARM does provided to candidates (e.g. more practice questions) not organize training classes for candidates who for some competence areas. Statistical information consequently revert to self-study learning methods. on pass rates, articles on the examiner’s approach, scoring the scripts and common mistakes, can be The general content of the professional examination published as additional guidance to candidates. program is published on ICARM’s website. However, access to the text books is required to gain a better Candidates are not charged an annual subscription nor understanding of the learning outcomes, examination administrative fee. The fee for sitting a single exam is methodology and expected competencies. EUR 150. 111 GOOD PRACTICE BOX Introducing a system of independent oversight to ensure the integrity of the professional examinations Various committees and stakeholders are involved ►► The Examination Committee comprising five in the professional education and examination members, including a representative from the program. Their role is to ensure that the adequate Oversight Council. It organizes and delivers separation of roles and responsibilities is in place the exams for the professional certification and that appropriate oversight is built into the program and develops the rules for the manner system to enhance the integrity of the examination and procedures regarding the professional process. These bodies include: examinations. ►► The Committee for Education, Training and ►► The recently established Examination Oversight Publications which consists of seven ICARM Committee comprising five members, including members. Among other duties, it is responsible two from the Ministry of Finance as well as the for developing and updating the program for ICARM President. The role of this Committee is professional certification and recommending the to oversee the operations of the Examination annual CPD program. Committee and ensure the integrity of the professional examinations. Practical experience perform any evaluation of professional skills acquired at the workplace, nor are the candidates required requirements to maintain and complete a record or other form Upon successful completion of the education of documentation demonstrating achievement of program, a candidate must also obtain three years professional skills. Only the length of time engaged of practical experience, two of which must be under in practice is evaluated, rather than the level, the supervision of a Certified Auditor and member appropriateness and variety of skills obtained. of ICARM. The practical experience requirement can Learning outcomes for professional skills and be attained before, during or after completion of the professional values, ethics and attitudes, are not education program. formally prescribed by ICARM. Some of the required The input approach is used to measure practical learning outcomes relating to professional skills and experience. In order to confirm their practical professional values, ethics and attitudes, are obtained experience, candidates are required to provide: within the education program. For example, topics on professional ethics and the IESBA Code of Ethics •• A letter of confirmation of the work experience are incorporated within the Auditing exams, while from the audit firm where the candidate practiced; professional and business ethics are examined as part and of Corporate Governance and Ethics. In addition, certain •• fficial employee records approved by the O learning outcomes for professional skills form part of Agency for Employment confirming the length of the curricula (e.g. case study scenarios through which employment and name of employer. candidates demonstrate professional judgment, critical thinking, problem-solving, evaluation of information All registered audit firms and audit practitioners are from various sources, and recommending solutions to eligible to act as approved employers for relevant unstructured problems). practical experience. The supervisor is not obliged to 112 Practice license Recognition Upon successful completion of the examination Candidates certified with other international program and obtaining the necessary practical professional bodies may obtain recognition of their experience, successful candidates can approach the qualification after successfully passing the local Tax Oversight Body and apply for an audit license. Audit and Business Law exams. All candidates must have companies and sole practitioners apply for practicing obtained an appropriate higher education degree (i.e. licenses upon submission of proof of appropriate a four-year bachelor degree of 240 credits) in the field professional indemnity insurance. Audit licenses are of Economics, Law or another appropriate Business issued indefinitely and are not subject to periodical major. They must also be fluent in Macedonian. So renewals. far, 13 members have received recognition of foreign professional designations, of which 12 are ACCA and one is a USA CPA. ACCA only offers exemptions for a candidate who has successfully attained a professional qualification from ICARM’s education program. Exemptions are from ACCA papers in: Accountant in Business, Management Accounting and Financial Accounting. Continuing Professional Development (CPD) The CPD requirement is mandated by law and the system in place is not very flexible. All CPD is verifiable. Access to CPD can be difficult because ICARM only provides CPD training a few times a year. There is a need to introduce an output- based CPD measurement system that would focus on the achievement of the learning outcomes by audit partners as required by the revised IES 8. Requirements only organized three times per year, which together amount to 60 CPD hours. These events are usually The CPD requirement is determined by law. All Certified lectures with an audience of between 80 and 140 Auditors need to attend 120 hours of CPD training over members at one time. a three-year period, and achieve a minimum of 30 CPD units annually. Members on a career break (i.e. maternity leave) or those with employment abroad are exempted from The Law on Auditing also designates ICARM or other full compliance. accredited relevant institutions abroad as eligible for organizing and providing CPD. The CPD system in place ICARM is currently revising its CPD system to address is not very flexible and access to CPD can be difficult some of these issues, including implementing an for some members. This is because, in practice, ICARM electronic-online system of verifiable CPD, organizing is the only institution that organizes formal CPD events. in-country regional workshops for smaller groups of No credits are approved to members for CPD activities participants, and exploring a more focused workshop or training carried out with other institutions or with style for the CPD events. It is also considering employers – whether in-country or abroad – and only outsourcing training to, for example, large accounting verifiable CPD is recognized. At present, seminars are firms and international experts. 113 GOOD PRACTICE BOX Integrated CPD and Quality Assurance Review systems ICARM’s quality assurance review system was the quality assurance review system to move established with the support of the National toward a preventive system, rather than being REPARIS program and continued through a 2010 purely detective. The following actions are being twinning project with the French professional taken: bodies CNCC and CSOEC. Two qualified inspectors ►► Quality assurance review findings feed into - full time employees of ICARM - perform quality the CPD annual program: frequent findings and assurance reviews and report the findings to assessment methodologies are shared with the Committee on Quality Control. Recent quality members and emphasis is placed on tailoring review results indicate that the implementation CPD annual sessions to areas where most of ISA remains a challenge for local Small- and findings are noted; Medium-Sized Practices (SMPs). Issues relating to deficiencies in audit methodology, internal ►► Target audience to receive specific or additional quality control mechanisms, limited use of experts CPD is identified during quality assurance with appropriate specialized knowledge and reviews and additional CPD is made available inappropriate or insufficient documentation are for those SMPs; and frequently identified. ►► More rigorous monitoring of CPD requirement is performed during quality assurance reviews The findings of the quality assurance review have for professionals auditing Public Interest Entities. been integrated with the CPD system. This enables GOOD PRACTICE BOX Resolving capacity constraints by outsourcing CPD delivery One of the CPD challenges faced by ICARM is training opportunities to members. Through sourcing trainers with adequate relevant experience its partnership with the French professional and knowledge to deliver CPD activities to its bodies (CNCC and CSOEC), foreign practitioners members. delivered a five-day training session on French audit documentation tools through practical case ICARM is addressing this issue by taking the studies. following actions: ►► Outsourcing the delivery of CPD sessions to Member satisfaction and feedback on such CPD international network accountancy firms on opportunities has been highly appraised by the topics such as ISA, IFRS Standards, the SMEs audience of practitioners, who had the chance to Standard; and receive quality presentations on current professional ►► Introducing international experts to provide topics. 114 Measurement methods In order to deliver CPD, ICARM engages part-time lecturers. The criteria for such lecturers are not clearly The method of measuring CPD completion is input- specified. However, they are usually practicing auditors based. ICARM administrative staff record the hours or – in cases of regulatory updates – professionals completed by members by verifying their presence at designated by their respective institution (e.g. Central CPD events. When members do not have enough CPD Bank, Insurance Supervisor, Central Registry, Tax units, ICARM sends follow up emails and notifications Authorities, the Office for Preventing Money Laundering emphasizing the importance of CPD and the legal and Financial Terrorism, the Security Exchange requirement to comply. There is a need to introduce a Commission, the Office for Financial Intelligence etc.). more structured measurement approach which would A more structured approach is necessary in order to focus on the achievement of the learning outcomes by develop a register of CPD trainers who, in addition audit partners, as required by the revised IES 8 which to possessing technical knowledge and professional became effective in July 2016. experience, also have the necessary soft skills to According to the Law on Auditing, if an auditor fails to deliver training. comply with CPD requirements ICARM can temporarily The CPD program offered by ICARM is mandatory for exclude the auditor from membership for a period of all members. It is tailored primarily to satisfy the needs up to three years. After this, the Oversight Council of practicing statutory auditors and covers technical will revoke the auditor’s license for the same period. topics and developments in regulations. ICARM’s Management Board has the final authority to decide whether there is a case to start disciplinary Previous CPD programs included topics such as recent procedures, as proposed by the Disciplinary Committee. changes in professional standards, the legal framework related to financial reporting and auditing, and the quality control results and findings. Less importance CPD program was given to soft skills. Annual CPD Programs include four hours dedicated to the Code of Ethics and its The development of the CPD program starts with the requirements and related guidance, as well as Committee of Education, Training and Publications. The examples of threats and safeguards. The absence of Committee develops a proposal for the annual program competence maps and frameworks results in members in an intra-committee consultative process which takes not being trained in effective communication with into account: new updates in professional standards team members, promotion skills, client management (IFRS Standards, ISA, IESBA Code of Ethics, National and governance structures. Mentoring and coaching Legislation related to Accounting, Finance, Taxation, skills necessary to assist the professional career Business Law and Governance), results from the development of the audit personnel has also not been quality assurance review process, as well as feedback the subject of CPD training. Finally, no specialized from members. The Education Committee submits its training activities are developed to satisfy the different proposal to the Management Board for approval. needs of the members (e.g. the needs of internal auditors or auditors practicing in specific industries). CPD Courses 35% 31% 28% Professional Auditing Financial 6% Ethics and other Taxes and standards and reporting and topics regulatory updates accounting updates 115 Benchmarking Results ICARM’s education program offers very good coverage of Auditing and Financial Accounting topics and scores well compared to IES. Improvements in Business and Organizational Environment and Business Strategy and Management areas would further align the program to IES. Compared with the ACCA benchmark, the program could benefit from introducing more advanced level papers that provide candidates with an advanced level of proficiency in Corporate Reporting, Financial and Performance Management. Syllabus Profile against IES Benchmark Auditor SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 0% 20% 40% 60% 80% 100% 116 Syllabus Profile against ACCA Benchmark Auditor SUBJECTS Accountant in Business Advanced Audit and Assurance Advanced Financial Management Advanced Performance Management Audit and Assurance Business Analysis Corporate Reporting Financial Accounting Financial Management Financial Reporting Governance, Risk and Ethics Management Accounting Performance Management 0% 20% 40% 60% 80% 100% 117 118 Montenegro at a glance About ICAM: An associate member of IFAC, ICAM offers three professional qualifications: University of Montenegro, Bookkeeper, Management Accountant and Faculty of Economics Certified Accountant. Subscriptions to the monthly magazine are the primary source of ICAM’s funding. ICAM has established partnerships with regional PAOs in Serbia and Bosnia and Herzegovina - RS. About the Faculty: The Faculty is mainly funded by student fees with some state support and is partially autonomous in developing undergraduate and master’s programs. All The professional education and training programs are accredited nationally. program is based on the Montenegrin Educational Standards and the 2007 ACCA curriculum. Structured review and update to the Faculty resources: Professors are highly education program and the teaching resources qualified and engage actively with the local is necessary. profession. Teacher-student ratios are relatively high in the first three years of study but drop significantly in the final academic year. CPD requirements are determined by ICAM, The Accounting program offers undergraduate which is the only accredited provider of and master’s degrees which benefit from classroom-based training and seminars. some recognition and exemptions to local CPD enforcement should be strengthened PAO education programs. Exemptions are also considerably. available for the ACCA program. Practical experience is not a requirement to complete accounting programs. Benchmarking results: The programs’ scores against the IES benchmark could be improved Demand for accounting education is stable. to ensure greater alignment in areas such as Almost a quarter of students at the university Governance, Risk and Ethics, and Advanced select a degree with a specialization in Financial and Performance Management. accounting. Benchmarking results: master’s and undergraduate programs compare well against IES benchmarks. For further alignment with Institute of Certified Accountants of ACCA improvements can be made in the Montenegro (ICAM) areas of Ethics and Financial Accounting and Reporting. CIPFA scores are low, especially in the areas of Public Sector Financial Reporting. 119 Key survey facts 2 340 Respondents 4 Students Educational Programs Reforming the Accounting and Auditing Framework in Montenegro The Government of Montenegro is The most significant amendments concerning engaged in a process of developing new legislation accountancy education include: on Accounting and Auditing for the purpose of ►► Introducing a requirement for mandatory CPD harmonizing requirements with the EU acquis. for certified auditors based on a program of The reforms have been supported by a three- professional training approved by the Ministry year World Bank-financed technical assistance and of Finance; and capacity building project, implemented between 2013 and 2016. New laws are expected to replace ►► Allowing practical experience to be met during the 2005 Law on Accounting and Auditing and to the professional education program and reducing significantly reshape and modernize the accounting the length of time required to become an legal framework. accountant from approximately nine to six years. Contacts Tanja Lakovic Ana Lalevic Filipovic University of Montenegro, University of Montenegro, Faculty of Economics Faculty of Economics tanjalakovic.me@gmail.com savana@t-com.me www.ekonomija.ac.me www.ekonomija.ac.me Igor Pavicevic Prvoslava Klepo Vladislav Karadzic Institute of Certified Accountants Institute of Certified Accountants Institute of Certified Accountants of Montenegro (ICAM) of Montenegro (ICAM) of Montenegro (ICAM) isrcg@isrcg.org prvoslava.klepo@isrcg.org isrcg@isrcg.org www.isrcg.org www.isrcg.org www.isrcg.org 120 University of Montenegro, Faculty of Economics About the Faculty Student fees are the most significant source of funding and represent 74 percent of the available budget. Educational programs are accredited at the national level. The Faculty of Economics is part of the public University Funding Sources of Montenegro. It was established in the 1960s and was part of the University of Belgrade until 1974. Since its establishment, 7,000 students have graduated, more 21% 74% than 400 have earned a master’s degree and over 50 PhDs have been awarded. Government Sources of funding Student fees Student fees are the major source of funding, 5% representing 74 percent of overall funds. Other Level of autonomy International Business; (vii) Information Systems; (viii) The Faculty is partially autonomous in developing new Public Sector Economics; (ix) Quantitative Economics; undergraduate and master’s programs, subject to and (x) European Economic Integration. approval by the University Senate. The assessment methodology is decided autonomously at the Faculty The overall number of admissions to the undergraduate level but examination formats are determined by law. program is 400 students; on average, 300 students The Faculty is independent in developing its own rules graduate each year. All undergraduate programs and policies regarding the examination format and last for four years (eight semesters and 240 ECTS). methodology and methods of delivery of courses. Master’s programs are for one year and 60 ECTS (two The Faculty has autonomy in establishing academic semesters, of which one semester is devoted to a partnerships with other faculties and universities in thesis). Undergraduate programs are composed of the country and abroad. The overall number of students compulsory and elective courses while the master’s admitted to the Faculty is determined by annual quotas program comprises only compulsory courses. set by the Government. Accreditation Education programs Montenegro has been a member of the Bologna The undergraduate program has ten modules in process and the European Higher Education Area since which students enroll in the fourth year of study: 2007. All programs are accredited at the national level. (i) Accounting; (ii) Management; (iii) Marketing; (iv) Entrepreneurship and Business; (v) Finance; (vi) 121 The Accounting Program The program does not require practical experience or internships for graduates from the undergraduate and master’s programs. Guest speakers from practice are occasionally involved in the teaching process. Type of degrees The Faculty offers an undergraduate degree in Economics and has also offered a specialization in Accountancy since 2010. The program was designed and introduced through a Tempus joint project with the University of Ljubljana, Slovenia, the University of Greenwich, UK, and Leon Kozminski Academy of Entrepreneurship and Management, Poland. A master’s degree in accounting is also offered. All courses in the master’s program are compulsory courses. Curriculum The table below shows the core and elective accounting and auditing courses in the undergraduate accounting program: Undergraduate Second Year Third year Fourth Year Accounting Elective subject: Financial Management Financial Institutions Accounting Audit and Control Cost Accounting Budgetary Accounting Advanced Financial Reporting Corporate Management and Control The master’s program is a one-year program and Practical experience includes three accounting and auditing core compulsory courses: Management Accounting, Corporate Finance There is no internship or practical experience and Auditing. requirement for undergraduate, master’s or PhD levels of education. Guest speakers from the accounting and auditing practice are occasionally invited to engage in Linkages to professional the teaching process. qualification There is a system in place for exemptions with the Curriculum updates and reviews PAO. Curricula review cycles are usually performed every The ACCA offers exemptions for graduates of five years. Since the undergraduate program with the undergraduate and master’s programs from an accounting specialization is relatively new (it was the following papers in: Accountant in Business; introduced in 2010), with the first two years considered Management Accounting; Financial Accounting; and as a pilot phase, the next review cycle is planned for Corporate and Business Law. 2017. 122 GOOD PRACTICE BOX Fostering collaboration between the university and PAO on accounting programs The lack of exemptions between university and PAO concentration are exempt from the following papers education can cause excessive delays for aspiring when entering the professional education system candidates to reach the point of qualification. For of ICAM: this reason, ensuring better integration between ►► Preparation of Financial Statements academic and professional accountancy programs is an important process that enables students to ►► Human Resources Management find a shorter route to qualification. ►► Information Systems The Institute of Certified Accountants of Montenegro ►► Corporate and Business Law. (ICAM) collaborates with the University of Montenegro to provide its students with exemptions For students who have completed a master’s from exams in the Management Accountant and degree in Accounting, there is an additional Certified Accountant stream. All students with exemption from the paper in Financial Information an undergraduate degree with an accounting for Management. Program evaluations and other relevant pronouncements are not currently available, whereas IFRS Standards dating back to 2010 Teaching quality and student satisfaction are evaluated have been translated and are available. The use of through anonymous electronic survey questionnaires. English textbooks and materials is modest. All courses The evaluation is prescribed by law and the University are currently only taught in the local language. Statute. Survey results are used for: IT technologies have been modestly used for the •• Teacher assessments and survey results form teaching process and mainly to communicate with part of the professors’ file and are taken into students. The usual course delivery methods include consideration for tenure. presentations, short case studies, in-class exercises, •• Feedback into the future curricula development and group and individual project assignments. process. Assessment methods Teaching materials Students are assessed through written interim Most accounting related textbooks are available in tests, final exams and also through class attendance. the local language. However, textbooks in Financial Questions are usually multiple choice, open-ended Management, Financial Reporting and Cost Accounting conceptual questions and case studies. Some courses need improvement. The availability of materials in also allow students aiming for higher grades to sit for the Faculty library could be improved e.g. English or an oral exam covering the entire syllabus. translated versions of up to date IFRS Standards, ISA 123 Faculty Body Professors are greatly involved in professional development activities, such as participating in conferences and publishing academic work. There is a need to expand the current staff levels as the teaching hours of most professors are excessive, and teacher-student ratios are quite high, except in the final year of study. The teaching norm is a minimum of 240 hours per 9 academic year (or 8 hours per week) for professors (full, associate and assistant professors) and 360 hours per academic year (or 12 hours per week) for assistants. Faculty members The staffing ratio is 50 students per professor (in the final year of study). In the second and third year, the ratio is much higher and averages about 300 students to each teacher. Professors’ salaries are sufficient to retain current members but it is difficult to attract new Faculty 67% members. Most of the accounting professors have Senior staff excessive teaching hours and the Faculty struggles to employ more junior staff to support the teaching 1:50 process. The English language proficiency of the Faculty body is considered very good. Teacher to The Faculty body is greatly involved in professional student ratio development activities such as participating in (in final year) accounting conferences and seminars and publishing articles in accredited journals. However, additional efforts are required to engage more in exchange visits abroad. Faculty Profiles 11% 25% Assistant professors 51-60 years 34% 25% Members Age 25% 22% Associate 41-50 years < 30 years Full time professors professors 33% 25% Teaching assistants 31-40 years Qualifications 22% Master 78% 58% Gender PhD 124 Student Body There is no Career Center or equivalent department at the Faculty and there is limited interaction with the corporate segment. Links with the profession are maintained through individual relationships of certain professors. 25% The demand for accounting education has remained stable and moderate, with approximately 25 percent of overall students choosing to specialize in Accountancy. Students choose Around 20 to 25 students graduate annually from the accounting stream. accounting programs The student drop-out rate for 2014/2015 was 27 percent. Students’ proficiency in English is assessed as very good. 80% Female students Linkages with the business sector There is no formal policy or strategy for maintaining links with the corporate sector. Relations are maintained with some local and international 35% accountancy firms in order to provide internship or graduates find employment opportunities for the students, or advance employment in the teaching process through the occasional inclusion financial sector of a business expert as a guest speaker. Events are organized (once a year) to connect students with industry for recruitment purposes. Faculty forums also provide students with some exposure to industry. Student Profiles The student body has international experience through the ERASMUS Exchange Program, the Trans European Mobility Program for University Students (TEMPUS) as well as other international mobility programs. 10% 35% Graduates employment per sector The Faculty has not established a career center nor a Government and method to track graduates’ employment. It is estimated not-for-profit Financial that 80 percent of graduates take accounting and audit sector related positions upon graduation. 30% Business community 25% Gender 80% Accounting and auditing profession 125 Benchmarking Results Both master’s and undergraduate programs score well compared to the IES benchmark with some improvements needed in the areas of Ethics and Financial Accounting and Reporting to maximize scores. Performance Management and Public Sector Financial Reporting score less well and coverage of these topics is low when compared to ACCA and CIPFA benchmarks. Syllabus Profile against IES Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 126 Syllabus Profile against ACCA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Accountant in Business Audit and Assurance Financial Accounting Financial Management Financial Reporting Management Accounting Performance Management 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Syllabus Profile against CIPFA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Audit and Assurance Financial Accounting Management Accounting Managing Finance Managing Organizations Public Sector Financial Reporting 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 127 Institute of Certified Accountants of Montenegro (ICAM) About ICAM ICAM is leading a consortium that fulfills a number of regulatory delegated tasks, including organizing and conducting professional education. Building the infrastructure of ICAM is seen as critical for achieving longer term goals including, for example, full membership of IFAC. ICAM was founded in 2006 by a Decree of the providing advice and issuing opinions regarding Government of Montenegro. In 2007, it became the application of accounting standards; and (vii) leader of a consortium established to fulfill a range of other publishing obligations (e.g. forms of financial regulatory tasks in the field of accounting and auditing, statements, instructions, etc.). including: (i) adopting, translating and publishing IFRS ICAM has been an associate member of IFAC and the Standards, ISA and the IESBA Code of Ethics, including FEE since 2013. all updates; (ii) organizing and conducting professional certification, education and examination; (iii) monitoring ICAM cooperates closely with the Serbian Association and quality control; (iv) maintaining registers of certified of Accountants and Auditors (SAAA), especially in accountants; (v) conducting professional education conducting joint education and continuing professional according to International Education Standards, (vi) development activities. The Profession The Institute of Certified The Institute of Accountants and Auditors of Accountants of Montenegro (ICAM) Montenegro (IAAM) is an association of accountants is the leader of a consortium (which organized as a voluntary professional organization includes the Economic Faculty of Montenegro without any regulatory powers and offering training and the Serbian Association of Accountants and and certification in the field of accounting and Auditors - SAAA) with the delegated authority management. to provide a range of regulatory tasks, including Both ICAM and IAAM are associate members of conducting professional education, examinations IFAC. and certification of accountants. Once candidates complete the professional education and practical experience requirements, the Ministry of Finance issues certificates entitling them to practice. 128 Members Member Profile ICARM has 1,550 members. Almost 49 percent of its 4% members are practicing accountants and auditors. Certified Accountants 8% Internal Auditors Resources ICAM’s financial budget is about EUR 190 per active 13% 51% Accounting Students and member. Subscriptions to the ICAM monthly magazine Tehnicians Associates “Accounting and Auditing” are a significant source of funding. 24% Building ICAM’s infrastructure is seen as critical in Management securing longer term goals, including, for example, Accountants full membership in IFAC. The key to a sustainable business model will be to identify revenue streams that can meet the technical and administrative costs Funding of delivering on ICAM’s mandate, which includes: examinations, quality control, discipline, continuing Other Qualification professional development, registration and other 10% key functions. One of the top priorities is to further 12% programs develop a road map for accountancy education. ICAM 26% is currently working on these and other priorities, as CPD Membership defined in its strategic planning documents. programs 10% fees 19% Governance ICAM’s bodies are the Assembly, the Board of Seminars, conferences & 23% publications Directors, the Steering Committee, the Secretary General and Commissions. All ICAM members are Supscription to PAO literature represented in the Assembly, with equal voting rights €190 accorded to authorized representatives of branch offices. Approximate annual budget per member The nine members of the Board of Directors are appointed by the Assembly for a term of four years, with the possibility of re-election. Five members must be Certified Accountants, two are appointed by the Staff Central Bank and the University of Montenegro. ICAM has eight full-time employees: the General Secretary; two Administrative Assistants; two The Steering Committee is a supervisory body employees responsible for professional education and comprising five members. Commissions are composed examinations; two involved in publishing activities; and of three to five members. There are two permanent one responsible for financial matters. Many external commissions: (i) the Commission for Membership consultants support the various governing bodies and and Validation of Title; and (ii) the Commission for ICAM’s activities, with the majority of them engaged Education, Training and Examination. in the professional education and examinations system. Governance Bodies Gender 52% 129 Education and Training Program The present education curricula are based on the 2007 ACCA syllabus, national legislation in areas of taxes and corporate law, IFRS Standards and ISA. ICAM updates changes in national legislation, ISA and IFRS Standards on a regular basis but no structured reviews have taken place to the ACCA education program since 2007. At present, it takes around nine years to become a licensed auditor. Achieving the practical experience requirement is measured solely based on the length of time employed under the supervision of a Certified Accountant or Management Accountant. Entry requirements Demand ICAM offers three professional designations: There are few admissions to ICAM’s professional Bookkeeper, Management Accountant, and Certified designation programs. Only 72 students applied in Accountant. The education entry requirements for each 2015 and from the 34 who graduated, the vast majority designation are the following: earned the Management Accountant designation. Despite the low entry numbers, the demand for •• B ookkeeper: candidates with a high school diploma accountancy education has been growing over recent are eligible to enter the program. years. •• Management Accountant: all candidates with university degree (240 ECTS credits), or higher education degree (180 ECTS credits) or college Content education (120 ECTS credits). The education program follows a progression model •• Certified Accountant: a candidate must first pass all with exit points at three levels, based on an individual’s examinations in the Management Accountant stream career choice. In order to progress to the Certified and must also have met the practical requirements Accountant level, candidates need to pass the nine of the Management Accountant designation (i.e. Management Accountant exams and complete three a minimum of three years of practical experience years of practical experience in accountancy. The table in accountancy). The candidate must then pass below provides an overview of the examinations in the five exams at the Certified Accountant level each module: and complete another three years of practical experience after acquiring the professional title ‘Management Accountant’. Professional Education Bookkeeper Management Accountant Certified Accountant Preparation of Financial Statements Preparation of Financial Statements Auditing and Assurance Services Tax System Tax System Human Resources Management Human Resources Management Management of Performance Information for Management Control Financial Information for Management Strategic Business Planning and Development Recording of Financial Transactions Financial Management and Control Cost Accounting Information Systems Complex Corporate Reporting Implementation of Audit Procedures Corporate Business Law Strategic Financial Management Compilation of Financial Statements Financial Reporting Planning, Control and Management Audit and Internal Control Performance 130 Three specialized licenses are also offered: Authorized Questions are prepared by the Examination Appraiser, Expert of Financial Reporting and Forensic Commission, which consists of three members (of Accountant. Few courses are available that cover topics which one is a representative of the profession, such as: Accounting Assistant, Excel for Accountants, another is from academia, and the third member is and Banking Accounting. ICAM’s Manager for Education). ICAM has based its professional accountants’ education Exam candidates’ anonymity is ensured by using bar and training model on the Montenegrin Educational codes on exam papers. Exams are moderated by the Standard (a national education standard based on Examination Commission. Papers with scores near the the IAESB’s International Educational Standards), the pass mark are double-marked. IESBA Code of Ethics for professional accountants, and relevant EU Directives. All current professional qualifications are based on the 2007 ACCA syllabus, Practical experience as translated into Serbian by the Serbian Association requirements of Accountants and Auditors (SAAA). ISA, IFRS Standards The following practical experience requirements are in and national legislation in areas of Taxes and Corporate place for the three professional titles: Law are updated by ICAM on a regular basis. However, the ACCA curriculum has not been updated since 2007. •• Bookkeeper: at least three years of practical work experience in accounting; •• Management Accountant: three years of practical Curriculum updates and reviews experience in accounting; and Some updates to the syllabus have been performed •• Certified Accountant: at least three years of through monthly magazines issued by ICAM together practical experience after acquiring the professional with lists of recommended literature and handouts title ‘Management Accountant’. provided to candidates. These updates mainly address changes in national laws, IFRS Standards and ISA. The input-based approach is used to measure and ICAM should implement a sustainable and structured verify the practical experience of candidates, who are process for syllabus reviews and updates. It should required to provide as proof: also establish a process to periodically review and enhance the framework for accountants’ education •• letter of confirmation from the employer A in line with good international practices, supported confirming experience in accounting; or by adequate educational materials, tutors and other •• A copy of the employment records. support available to candidates. Under the current education and practical experience Examinations requirements, it takes approximately nine years to become a licensed auditor. Proposed amendments ICAM organizes two regular examination sessions to the accounting and auditing legislation’s by-laws (in June and December), and one remedial session in would shorten this to six years because the practical September for candidates who failed the June session. experience requirement could then be met in Examinations comprise written papers with direct conjunction with the Certified Accountant professional theoretical questions, which account for a maximum exams. of 25 percent of the total questions. The remaining questions are based on the application of theoretical Learning outcomes for professional skills, and knowledge and international standards. professional values, ethics and attitudes, are not formally prescribed by ICAM. Some of the learning Pass rates are quite high compared to other regional outcomes that must be achieved upon completion of PAOs (approximately 75 percent) and are regularly the education program and the practical experience monitored by ICAM. Some reasons attributed to the requirement, are accomplished within the education high pass rates include the organization of high quality program. However, further reform is needed to preparatory courses for candidates as well as the introduce a system that would recognize practical availability offered to students of occasional free one- experience based on a competency framework rather to-one consultations. than just relying on the length of time employed under eligible supervisors. 131 Practice license Recognition Only Certified Accountants can apply and be awarded Candidates certified with other relevant IFAC member a license to practice as a statutory auditor. Audit professional bodies abroad can apply for recognition licenses are issued by the Ministry of Finance and upon successfully passing the Tax and Business Law are valid indefinitely. In order to be eligible for exams. There is also a mutual recognition agreement practicing certificates, Certified Accountants need to for professional designations of other regional bodies complete three years of practical experience through on the basis of comparable education programs (i.e. employment with an audit firm, under the supervision with SAAA and AAARS). In the past three years, of a Certified Auditor. nine members have received recognition of foreign professional designations. Continuing Professional Development (CPD) The CPD requirement is prescribed by ICAM, which is also the only recognized CPD provider for verifiable classroom trainings and seminars. There are a number of admissible CPD units. Improvements are necessary in the CPD enforcement mechanisms. It is expected that such improvements will be introduced soon through revised legislation. Requirements a new professional role; coaching and mentoring (provided or received); self-directed and unstructured The CPD requirement is prescribed by ICAM. All activities; developing and delivering courses and CPD professional accountants need to attend 40 hours of sessions; writing articles, papers and books; and CPD training annually, of which 20 must be verifiable research, including reading professional literature or and completed via classroom training and seminars. journals. Self-directed and unstructured CPD includes Members who have legitimate reasons (e.g. illness, subscribing to professional magazines and literature or a prolonged stay aboard) are allowed to complete approved by ICAM’s Board of Directors (including 120 hours of CPD over a three-year period, of which ICAM’s magazine) and may account for as much as 20 at least 60 hours must be verifiable via classroom hours of non-verifiable CPD. training and seminars. Members who do not comply with the CPD requirement in the three-year period must pass an exam which tests a body of knowledge Measurement methods from Accounting and Auditing, the IESBA Code of Ethics, Tax, ISA and IFRS Standards. Because professional The method for measuring completion of the CPD titles, cannot be revoked or suspended according requirement is input-based. Members are required to legislation, licenses of professionals who do not to maintain their own records. ICAM also keeps its pass such examinations are not revoked in practice. own records on CPD points. Members report annually Changes are currently being proposed to the laws to ICAM on the number of CPD hours completed and which would introduce a mandatory CPD requirement must provide declarations that the CPD requirement for licensed auditors to address this issue. has been observed in order to renew their accounting certification. ICAM verifies the total hours and also ICAM is the only recognized CPD provider for verifiable checks the quality of the lecturers but does not classroom training and seminars. Other non-verifiable perform sample checks or audits of the CPD activity CPD requirements include: practical experience in reported. 132 CPD program Regulatory updates and tax training are the most significant topics covered in CPD programs. Annual CPD events are usually organized in the form of CPD programs include five hours dedicated to the lectures, forums or roundtables, which are often IESBA Code of Ethics and its requirements. The lack of attended by over 150 members. CPD trainers are competence maps and frameworks results in members engaged on a part-time basis by ICAM. CPD lecturers not being trained in effective interpersonal and are usually practitioners and academics with master’s communication skills. Finally, no separate CPD stream or doctorate diplomas. There is close cooperation with is in place for practicing auditors. the SAAA when conducting joint CPD sessions. CPD Courses 37% Taxes and regulatory 27% 24% 12% updates Auditing standards Financial Professional and updates reporting and Ethics accounting GOOD PRACTICE BOX Providing members with useful guidance about CPD It is important that CPD requirements are as clear ►► rovides CPD guidance and publishes the CPD P as possible and that members can easily access policy on its website; and the CPD policy for their reference in order to ►► P rovides responses to frequently asked facilitate clear guidance to members on their CPD questions on CPD (i.e. phone help line). obligations. To achieve this, ICAM undertakes the following activities: 133 Benchmarking Results The education program scores well in several areas but there is a need to improve areas such as Governance, Risk and Ethics, Commitment to the Public Interest and Advanced Financial and Performance Management. Syllabus Profile against IES Benchmark Management Accountant Certified Accountant SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 0% 20% 40% 60% 80% 100% 134 Syllabus Profile against ACCA Benchmark Management Accountant Certified Accountant SUBJECTS Accountant in Business Advanced Audit and Assurance Advanced Financial Management Advanced Performance Management Audit and Assurance Business Analysis Corporate Reporting Financial Accounting Financial Management Financial Reporting Governance, Risk and Ethics Management Accounting Performance Management 0% 20% 40% 60% 80% 100% 135 136 Serbia at a glance About the Faculty: The Faculty is principally funded by student fees and enjoys partial autonomy in developing new programs and in establishing international cooperation. Programs are all accredited at the national level. Well-established accounting programs at the undergraduate and master’s levels. Professional bodies provide recognition to graduates assessed on a case-by-case basis. Exemptions are available from the ACCA program. A structured and more frequent University of Belgrade, process for curricula review should be considered. Faculty of Economics Demand for accounting education is high and Faculty resources: Highly qualified professors with continues to grow: nearly a third of university active engagement in the local profession. Although students are enrolled in accounting and salaries are at average levels, attracting young talent auditing programs. Students benefit from is not difficult because of the Faculty’s high rating and careers support and networking opportunities. reputation in the country. Benchmarking results: Both master’s and undergraduate programs score well against the IES benchmark. Programs could benefit from the inclusion of courses on Public Sector Financial Reporting. 137 About the SAAA: an IFAC member since 1997 and one of the oldest professional bodies in The Serbian the region. It is a voluntary organization of Association of accountants and auditors with over 4,000 Accountants and members. The SAAA works closely with other Auditors (SAAA) regional professional bodies. The professional education and training program offers three qualification routes: Accountant, Certified Accountant and Certified About the CAA: The CAA is a professional Public Accountant. The programs benefit from organization for auditors and an associate mutual recognition with other professional member of IFAC. It has a mandate established bodies in the region as well as exemptions by law and its membership comprises 390 from the ACCA program. individuals and 63 audit firms. The SAAA has introduced mandatory CPD requirements for its members and monitors The professional training and education compliance with these requirements. It offers program could benefit from adopting a a variety of CPD courses, including specialized learning outcomes-based approach consistent training in both public and private sectors. with IESs. Benchmarking results: The Certified Public Accountant program is fully aligned with IES requirements. The Certified Accountant CPD is mandatory for statutory auditors program is also well aligned with IESs and is prescribed by law. The requirements but could be improved in areas such as include attendance at workshops or seminars Governance, Risk, Ethics and Corporate organized by the CAA. The program should Reporting. introduce outcomes-based measurement approach as encouraged by the IES. Benchmarking results: Audit and Assurance components of the program achieve high Chamber of Authorized scores against the ACCA and IES benchmarks. Auditors (CAA) The program needs to be improved by introducing learning outcomes in the areas of Ethics and Commitment to the Public Interest. 138 Key survey facts 3 1,225 Respondents 5 Students Educational Programs Auditing and Accounting ROSC Update: Areas for Consideration Relating to Accountancy Education The recent Report on the Observance of Standards preparation of accounting students in IFRS and Codes, Accounting and Auditing (ROSC A&A) Standards, particularly at the undergraduate level Update for Serbia of June 2015 provides several and that teaching materials often neglect issues of recommendations relating to accountancy education. practical application. These include focusing on the practical application In 2016, a four-year project (STAR-CFR: Serbia of IFRS Standards and other financial reporting Technical Assistance for Reform of Corporate standards as well as introducing courses on the Financial Reporting) was launched which also aims assessment and communication of deficiencies in to strengthen accounting and auditing education. internal controls. The project will be implemented by the Serbian The ROSC A&A Update also found that current Ministry of Finance. university curricula do not assure adequate Contacts Danica Jovic Kata Skaric Bosko Vidakovic Zoran Skobic Teaching Assistant, Full Professor in Chamber of Authorized Serbian Association of Faculty of Economics, Accounting, Faculty of Auditors (CAA) Accountants and Auditors University of Belgrade Economics, University of (SAAA) Belgrade dana@ekof.bg.ac.rs kata@ekof.bg.ac.rs office@kor.org.rs skobicz@srrs.rs www.bg.ac.rs www.bg.ac.rs www.kor.org.rs www.srrs.rs 139 University of Belgrade, Faculty of Economics About the Faculty The Faculty was founded in 1937. It is one of the oldest and most prestigious higher education institutions in the country. It offers undergraduate degrees, master’s and PhDs. Programs are accredited at the national level. The Faculty of Economics is part of the public University Funding Sources of Belgrade. Originally the Faculty was established as the Economic-Commerce Higher Education School in Government 1937. It was transformed into the Faculty of Economics 37% as part of the University of Belgrade in 1947. The Faculty established a Center for Economic Research in 1952. 10% Other 53% Student fees Sources of funding Student fees are the major source of funding, contributing to 53 percent of the available budget. undergraduate and master’s programs comprise compulsory and elective courses. Level of autonomy The Faculty is able to develop new undergraduate and graduate programs subject to approval by the Education programs University Senate. It decides autonomously on teaching The undergraduate program in Economics, Management and examination formats. Cooperation with higher and Statistics has 10 specialization modules in which education institutions from abroad is usually enacted students may enroll in their third year of study. by the University, based on the initiative of the Faculty. These are: (i) Management; (ii) Statistics; (iii) IT and The Faculty may participate in international projects Quantitative Finance; (iv) Accounting, Auditing and independently, for which no consent is needed from Financial Management; (v) Economics Analysis and other institutions. Policy; (vi) International Economics and International Trade; (vii) Retail Management and Marketing; (viii) Admission quotas are decided by the Government Marketing; (ix) Finance Banking; and (x) Insurance and of Serbia. The overall number of admissions to the Tourism and Hospitality. undergraduate program is around 1,500 students, with 1,000 students on average graduating each year. All undergraduate programs last for four years (eight Accreditation semesters and 240 ECTS). Master’s are one year Serbia has been a member of the Bologna process and programs and 60 ECTS (two semesters, of which the European Higher Education Area since 2003. All one semester is devoted to a master’s thesis). Both programs are accredited at the national level. 140 The Accounting Program Professional bodies provide recognition to graduates assessed on a case-by-case basis. Practical experience is not required to graduate from undergraduate and master’s programs. There is a need to update some of the materials and textbooks, especially those relating to Auditing and Ethics. A more frequent and structured process should be considered for curricula reviews and updates. Type of degrees of the undergraduate program. The master’s program in Accounting, Auditing and Business Finance admits The Faculty offers an undergraduate degree in approximately 55 students annually and has about 20 Economics with a specialization in Accounting, Auditing graduates every year. and Financial Management (since 1966). It also offers a master’s program in Accounting, Auditing and Business Finance. Approximately 28 percent of overall Curriculum annual admissions (around 420 students) choose the Accountancy specialization in the third academic year The table below shows the accounting and auditing related courses in the undergraduate program: Undergraduate First Year Second Year Third year Fourth Year Financial Management Cost Accounting Special-Purpose Financial Statements Accounting Accounting Theory and Policy of Accounting Information Systems Financial Statements Auditing Corporate Finance Comparative Accounting Special Accounting Internal Accounting The table below shows the core and elective accounting and auditing courses in the master’s program: Master Academic Year Financial Reporting One elective choice from Group 1 and Group 2: Company Income Policy •• roup 1: Company Valuation or Specific issues in G Specific Problems in Corporate Finance Auditing of Financial Statements. Organization of Accounting Information Systems •• roup 2: Business Strategy, Strategic Marketing, G Portfolio Management, EU Law, Financial Mathematics or Banking Management. 141 GOOD PRACTICE BOX Facilitating professional networking opportunities for students The Faculty supports several networking events master’s students and graduates. The database and activities aimed at providing students with is available online and represents a useful tool the opportunity to connect with the business for connecting job seekers with employers; community, including: ►► “Company Days”, which feature workshops ►► Organizing focused workshops on job search hosted by companies which are offering strategies, CV writing, and preparing for job employment and internship opportunities; and interviews; ►► EKOF ARENA “Business Case Study”, which is a ►► The Careers Center provides businesses and competition where students work together in financial institutions with access to its databases groups on a business case study. which contain information on final year students, Linkages to professional Practical experience qualification There is no internship or practical experience requirement for undergraduate, master’s or PhD levels The Serbian Association of Accountants and of education. Auditors (SAAA) provides exemptions to students with an undergraduate degree in Economics and a specialization in Accountancy, which are assessed on a case-by-case basis. Curriculum updates and reviews Updates to the curricula for undergraduate studies are The Chamber of Authorized Auditors (CAA) provides traditionally undertaken based on a self-assessment exemptions to graduates who have completed a degree process. The current curricula were created in 2006, in Economics with a specialization in Accountancy. with minor changes introduced in 2013. Teaching staff These exemptions apply to up to nine exams of the total continue to make regular annual updates to course of twelve courses covered by the professional program syllabi, as required. in: Theory and Principles of Accounting; Financial analysis; Managerial Accounting; Risk Management and Internal Control; Audit Theory; Business Information Program evaluations Systems; Microeconomics, General and Financial Economics; Financial Mathematics and Statistics; and All courses are evaluated by students through annual Financial Management of Undertakings. surveys carried out when students progress to their next year of study. The quality of teaching is evaluated The ACCA offers exemptions from papers in: for understandability, teachers’ abilities to disseminate Accountant in Business, Management Accounting, knowledge and provoke critical-thinking, and the Financial Accounting and Corporate and Business Law. quality of the teaching materials. Upon graduation, a survey is carried out of the students’ assessment of the overall quality of the entire program and education experience. 142 Teaching materials Assessment methods Accounting related textbooks available in local language The methods used to assess students at the have been rated as very good. However, textbooks undergraduate level vary for different courses. Class in other areas including, notably, Auditing and Ethics, activities account for between 5 and 20 percent of the need improvement. A new textbook for Auditing final score, interim exams for up to 30 percent, and was introduced at the end of 2015 which includes final written and/or oral exam for up to 60 percent. sections dealing with professional ethics based on the The pass mark is 50 percent. Written exams comprise requirements of the IESBA Code of Ethics. The study a combination of multiple choice questions, short materials for the course on Accounting Information theoretical and narrative questions and short case Systems and Theory and Policy of Financial Statements studies with narrative, or a combination of narrative are in the form of notes based on English textbooks. and mathematical elements. Some courses, notably the course on the Theory and Policy of Financial The use of English textbooks and materials is modest. Statements, require students to take an oral exam only. In addition, the most recent English or translated version of IFRS Standards, ISA and other relevant pronouncements are not available in the Faculty Library. All courses are taught only in the local language. Technologies have been used modestly in the teaching process, mainly to assist in communicating with students. Course delivery methods include: presentations, short case studies, in-class exercises, as well as group and individual project assignments. 143 Faculty Body There is an increasing demand for accountancy education and specialization, with some professors requesting additional teaching staff. Current professors are well qualified. Although salaries are at average levels, attracting young talent is not difficult as a result of the high rating and reputation of the Faculty. The teaching norm is between 120 and 180 hours per academic year (between four and six hours per 14 week) for professors (including full, associate and Faculty assistant professors) and between 240 and 300 hours members per academic year (between eight and ten hours per week) for assistants. Although Faculty members’ salaries are at average levels, attracting young talent is not seen as difficult as 64% a result of the high rating and reputation of the Faculty. Senior staff The Faculty body is involved in many professional development activities, including participating in accounting conferences, publishing manuals, writing 1:65 books and publishing articles in accredited journals, Teacher to as well as engaging in exchange visits abroad. student ratio Faculty Profiles 7% 7% Associate professors < 30 years 21% 14% 43% 61-70 years 29% Members Age Assistant professor Full time 21% 31-40 years professors 51-60 years 36% 22% Teaching assistants 41-50 years Qualifications 36% Master 64% Gender 64% PhD 144 Student Body There is a high demand for accountancy programs. The Faculty Career Center supports several activities and networking events which provide students with greater links to the corporate sector. 30% The demand for accounting education has been growing at about 7 percent annually, with approximately 30 percent of students choosing the Accounting and Students choose Auditing program. accounting The student drop-out rate is low at about 4.6 percent. programs Students’ English language proficiency is assessed as very good. 7% The average period of graduation for accounting Annual increase students is four years and seven months. in demand for accounting programs Linkages with the business sector The Career Center has been established at the Faculty 60% to manage links with the corporate sector. There is Students find some engagement with practitioners and Professional employment Accountancy Organizations. The Faculty’s Strategic Plan within 6 months of 2015-2020 foresees a more focused collaboration graduation with industry, through visiting lecturers, business simulations and case studies, as well as internship programs. Student Profiles The Faculty monitors graduates’ careers after they have left university through a survey. The survey provides data on various matters regarding student 15% 40% employment such as the time taken to find a job Graduates employment per sector after graduation and the sector in which they are employed. On average, up to 60 percent of graduates Financial sector are employed within six months of graduation. Business community 20% Government and not-for-profit 25% Gender 79% Accounting and auditing profession 145 Benchmarking Results Both undergraduate and master’s programs compare well against the IES benchmark with some improvements required in Financial Accounting and Reporting and Commitment to Public Interest. There is some room for improvement in Financial Accounting and Reporting and Performance Management courses. Public Sector Financial Reporting including IPSAS do not feature in the syllabi of either the undergraduate or master’s programs. Syllabus Profile against IES Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 146 Syllabus Profile against ACCA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Accountant in Business Audit and Assurance Financial Accounting Financial Management Financial Reporting Management Accounting Performance Management 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Syllabus Profile against CIPFA Benchmark Undergraduate Core Master Core Undergraduate Elective SUBJECTS Master Elective Audit and Assurance Financial Accounting Management Accounting Managing Finance Managing Organizations Public Sector Financial Reporting 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 147 Serbian Association of Accountants and Auditors (SAAA) About SAAA The SAAA is the oldest PAOs in the region. It was established in 1955 and has a voluntary membership of both accountants and auditors. It has a large membership of over 4,000, most of which are Certified Accountants. The SAAA has been a member of IFAC since 1997 and the FEE since 2013. The SAAA is a voluntary membership professional Members non-governmental organization for both accountants and auditors in Serbia. It was founded in 1955. The The SAAA has over 4,000 members, most of whom hold SAAA’s activities mostly involve organizing professional the Accountant and Certified Accountant designations. certification, education and training of members, as well as organizing direct support for the application of these international standards in everyday practice and Resources business operations. The SAAA has made a notable Key areas of the SAAA’s focus include enhancing contribution to the application of global, high quality and maintaining a professional education and CPD accounting standards and translates, publishes and system, as well as developing its member services promotes the implementation of IFRS Standards, the and international relations. The annual budget is SMEs Standard and IPSAS among its members and the approximately EUR 64 per member. wider economy. The SAAA has been a full member of IFAC since 1997 and became a member of the FEE in 2013. Governance The SAAA’s governing bodies include: the Assembly; The SAAA collaborates closely with other regional Oversight Board; Disciplinary Board; the Executive professional bodies such as the Institute of Certified Board (led by the Chairman); the General Secretary; Accountants of Montenegro (ICAM), the Association and the Commissions. The Executive, Oversight and of Accountants and Auditors of Republic of Srpska Supervisory board members serve for a term of four (AAARS) and the Society of Certified Accountants and years and are engaged on a voluntary basis. Auditors of Kosovo (SCAAK). The Profession The Accounting and Auditing obligations, notably regarding quality assurance profession is regulated by the Laws review and the promulgation of auditing standards on Accounting and Auditing. The adopted by the Government. Chamber of Authorized Auditors enjoys statutory The Serbian Association of Accountants and Auditors recognition. Its membership is mandatory for (SAAA) is a voluntary membership organization for licensed certified auditors and all audit firms. both accountants and auditors and is the oldest The Chamber has other regulatory powers and professional body in the region. 148 Funding Member Profiles 2% Other sources 12% Certified Public Accountant CPD 20% 56% 2% Internal Auditor programs Membership 49% Profile fees 47% Qualification Accountant 12% Certified programs Accountant €64 Approximate annual budget per member Governance Bodies 24% 48% Gender 60% Per Industry / Sector Practitioners Business sector Staff 5% The SAAA has 11 full-time employees: the General Financial Industry Secretary, three Administrative Assistants, two staff engaged in publishing activities, two engaged in quality control and assurance, and three staff who perform 23% education and examination tasks. Thirteen part-time Government consultants are engaged as support and outsourced technical staff. GOOD PRACTICE BOX Monitoring PAO performance using Key Performance Indicators The SAAA has developed a set of key performance ►► Member services (number of contacts, rate of indicators (KPIs) for different functions in order to successful responses, time taken to answer monitor performance against set targets for key members’ queries, rate of occurrence of similar activities. The KPIs are comprehensive and include issues, members’ satisfaction); a combination of quantitative, qualitative and output ►► CPD (number of participants, member indicators, by function: compliance with CPD, feedback surveys); and ►► Professional qualification (number of candidates, ►► International relations (a set of highly qualitative pass rates, drop-out rates, success rates); and output-based KPIs). 149 Education and Training Program The demand for the education program has remained stable and moderate. There is a developed system of mutual recognition with other regional professional bodies as well as a system of exemptions with ACCA. Entry requirements Demand The SAAA offers three professional qualifications: The demand for the professional education programs Accountant, Certified Accountant (CA) and Certified has remained stable and moderate. There are about Public Accountant (CPA). Candidates are required to 700 admissions, of which more than half are for have the following education in order to enter the the Certified Accountant qualification. Around 230 qualification programs: candidates successfully complete the professional education programs annually. •• Accountant: high school diploma. •• ertified Accountant: university undergraduate C degree (240 ECTS credits), higher education degree (180 ECTS credits), college education (120 ECTS credits), or have the Accountant professional designation. •• C ertified Public Accountants: university undergraduate degree (240 ECTS credits) and hold the Certified Accountant professional designation. GOOD PRACTICE BOX Integrating professional ethics across the curriculum Professional ethics, values and attitudes is an area on Ethics but the topics on professional values, ethics that is of critical importance for the accountancy and attitudes, are integrated into other subjects. profession and is also a topic that often attracts This approach allows both providers of education significant attention by regulators. It is widely and recipients of ethics education to consider understood that teaching ethics in effective professional ethics as a skillset that is pervasive to ways is inherently difficult but it is important that the accountant’s day-to-day role, rather than as a professional education includes adequate coverage skill used only in particular situations. of professional ethics as part of their syllabi. The SAAA also provides pre-qualification courses The SAAA curricula do not have a separate course on the IESBA’s Code of Ethics. 150 Content The table below shows the examinations for each qualification: Professional Education Accountant Certified Accountant Certified Public Accountant Recording Financial Transactions Preparing Financial Statements Audit and Assurance Services Information for Management Financial Information for Management Performance Management Control Preparing Financial Statements Managing People Strategic Business Planning and Development Cost Accounting Information Systems Complex Corporate Reporting Audit Procedures Corporate and Business Law Strategic Financial Management Tax System Tax System Managing People and Systems Financial Management and Control Financial Statements Compilation Financial Reporting Planning, Control and Audit and Internal Review Performance Management Other specialized licenses offered by the SAAA include: Examinations Internal Auditor, Management Accountant, Tax and Financial Advisor, Forensic Accountant and Authorized There are two exam sittings per year (June and Valuator. There is a practical experience requirement December). All exams are written and closed book, of at least three years for each of these specialized with questions including multiple-choice, essays, cases licenses. studies, computations, reports, and memos. Curriculum updates and reviews The SAAA syllabi are based on the ACCA’s professional syllabus. Periodic reviews and comparisons with ACCA are performed by the Education Committee and syllabi are updated if needed. The most recurrent updates took place in January 2016 to reflect changes in tax regulations. Changes in tax and law as well as revisions to IFRS Standards and ISA are reflected in supplementary education materials. 151 GOOD PRACTICE BOX Introducing external oversight in the professional examination process The Education Board has overall responsibility be read by in-house developed software. for the professional education delivered by the Candidates are informed about results via email or SAAA. Among other duties, it is the body that by post. Reports on examinations, including pass decides on candidate appeals and potential second rates, drop-out rates, average scores and average assessments. length of studies, are presented twice a year by The Central Examination Committee organizes the Central Examination Committee to the SAAA and supervises the 14 Examination Committees Education Board. In turn, the SAAA Education Board responsible for preparation of the exams and submits an annual report to the SAAA Executive marking schemes. Board, the SAAA Oversight Board and the Assembly. Exams are marked by a temporary working In order to enhance and ensure quality control over body appointed and supervised by the Central the integrity of the examination process, the SAAA Examination Committee. Scores close to the pass has introduced the following oversight mechanisms: mark (i.e. ranging between 46 and 52 percent) ►► An external Certification Quality Control as well as a randomly selected sample of papers Committee which is an independent body that (10 percent of the total) are subject to second performs periodical reviews of the examination (double) marking. This is performed by members process and papers. It has one member from the of the Examination Committee, as appointed by the UK, one from Greece and one from Serbia; and Central Examination Committee. ►► A Joint Supervisory Commission (exam Candidates’ anonymity is secured by encrypted supervisors) consisting of members from coding of candidates’ data. Each candidate’s paper academia who monitor the integrity and quality is marked by an encrypted bar code which can only of the examination process itself. GOOD PRACTICE BOX Regional cooperation and recognition of qualifications and CPD Mutual recognition agreements are in effect with SAAA CPA members who have successfully several regional professional bodies including: completed the recognition process have the right to practice as statutory auditors in Montenegro and ►► The Institute of Certified Accountants of Bosnia and Herzegovina. In addition, members can Montenegro (ICAM); fulfill their CPD requirements with any of the regional ►► The Association of Accountants and Auditors of PAOs where mutual recognition agreements are in Republic Srpska (AAARS); and effect. ►► The Union of Accountants, Auditors and Financial Workers of Federation of Bosnia and Herzegovina (SRRF-FBH). 152 Practical experience and Reporting, IT Accounting, Financial Management, Financial Analyses and Control, Taxation) as well as requirements the type of work they have performed (ranging from The following practical experience requirements are in supervised work to independent work). Professional place for the three professional titles: skills are required that relate to Ethics and Professional Behavior. Declarations confirming the practical •• Accountant: at least three years of practical work experience are provided by both the employer and experience in accounting; the supervisor. Eligible supervisors are members in •• Certified Accountant: between three and five years good standing or practitioners of other IFAC recognized of practical experience in accounting and financial member bodies. The SAAA Education Board verifies reporting depending on type of prior education; and practical experience by auditing the declarations on a •• ertified Public Accountant: at least three years of C sample basis. There is no approved employer scheme practical experience achieved within the Certified in place. Accountant designation. Recognition The practical experience required for all qualifications can be achieved before, alongside or after the study The SAAA recognizes other qualifications which program. are either based on established Memoranda of Understanding or qualification programs offered by A reduction in the practical experience requirement other IFAC member bodies, after candidates sit and is possible for up to 15 months only for candidates successfully pass the Serbian tax and law examination. with a background as educators and having substantial In the past three years, 60 members have received experience in the field of accounting and auditing (e.g. recognition of foreign professional designations. university professors and lecturers). Members holding the Accountant designation are A combination of an input-based and output-based awarded blanket exemption from seven ACCA Certified approach is used to measure practical experience. Accounting Technician papers. Guidelines are included in individual students’ Practical Experience logbooks, which are used to record such Members holding the CA and CPA designation receive experiences. Students record their experience in the a blanket exemption from three ACCA papers and can specific technical competence areas (Audit, Financial apply for up to nine exams, subject to individual appeal Accounting and Reporting, Management Accounting for the ACCA qualification. GOOD PRACTICE BOX Active engagement on public sector accounting issues Approximately 25 percent of SAAA members work The SAAA recently established a Public Sector CPA directly or indirectly in the public sector. The designation and entered into a Memorandum of SAAA is actively engaged in public sector issues. Understanding with CIPFA on a Joint Public Sector These include: promoting sound public sector Qualification. This allows a fast-track route to CIPFA accounting practices; providing CPD for public membership whereby CAs and CPAs with suitable sector accountants; and organizing bi-annual three- experience in the public sector are exempt from day seminars for public sector accountants, State CIPFA exams. This new designation has been Auditors and auditors of public sector entities. very popular with members, as indicated by a large increase in the number of candidates to the program within the last year. 153 Continuing Professional Development (CPD) The SAAA requires all members to achieve 120 hours of CPD in each three year rolling period. Members are reminded of the importance of CPD completion through various means and CPD completion is monitored by the SAAA. CPD activities include specialized trainings that meet the needs of both private and public sector members. Requirements Measurement methods CPD is mandatory for all SAAA members. All members CPD is measured through an input-based approach. need to attend 120 hours of CPD training in each Records of structured CPD units for members are three year rolling period, of which 60 hours must be maintained and updated by SAAA staff. There is no verifiable and structured and at least 20 hours needs prescribed form for any unstructured CPD activity. to be completed annually. Periodic reviews are performed to verify CPD activities and non-complying members are informed The SAAA provides most of the verifiable classroom of their status and possible remedial courses of action. training to its members. However, based on regional Further, non-compliance with CPD requirements results agreements on mutual recognition, it is possible in disciplinary committee actions. for members to fulfill their CPD obligations with other regional PAOs. The importance of the CPD requirements are communicated to members through CPD program webpage announcements, bulletins and magazines. In addition, the SAAA regularly promotes a range of CPD events are usually organized in the form of CPD opportunities and activities. Recognized CPD lectures, forums or roundtables with audiences of units include: attendance in academic conferences and between 80 and 300 members. CPD trainers are workshops; formal education (master’s, PhD); coaching either employees of the SAAA or engaged on a part- and mentoring; delivering and developing CPD; writing time basis. CPD lecturers are usually practitioners and articles and books; and research, including reading academics with appropriate and relevant experience. professional literature. CPD programs include 28 hours per annum on the IESBA Code of Ethics and its requirements. Specialized fields of CPD trainings are available, such as Money Laundering Prevention and Fraud. The SAAA is primarily an organization of accountants and there is no separate CPD system for audit partners. CPD Courses 42% Financial 34% Taxes and 15% 9% reporting and regulatory Professional Auditing accounting updates Ethics and other standards and topics updates 154 Benchmarking Results The CPA program complies fully with the IES benchmark. Some adjustments are needed to the CA program in order to align it better to IES and the ACCA benchmark, including areas such as Governance, Risk and Ethics, and Corporate Reporting. Proficiency levels of learning outcomes between the CA and CPA streams are well developed and follow a scale of progression. Syllabus Profile against IES Benchmark Certified Accountant Certified Public Accountant SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 0% 20% 40% 60% 80% 100% 155 Syllabus Profile against ACCA Benchmark Certified Accountant Certified Public Accountant SUBJECTS Accountant in Business Advanced Audit and Assurance Advanced Financial Management Advanced Performance Management Audit and Assurance Business Analysis Corporate Reporting Financial Accounting Financial Management Financial Reporting Governance, Risk and Ethics Management Accounting Performance Management 0% 20% 40% 60% 80% 100% 156 Chamber of Authorized Auditors (CAA) About CAA CAA is a professional organization of auditors recognized by the law. Its membership comprises 390 individual members and 63 audit companies. The CAA became an associate IFAC member in 2014 and aspires to full membership. The CAA was established in 2006. This professional Members body of auditors recognized by law has the authority to: (i) prepare and conduct qualifying exams to certified The CAA’s membership comprises 390 individual auditors; (ii) prepare and organize CPD for licensed members and 63 audit companies. The average age certified auditors; (iii) maintain the register of licensed of CAA members is 46 years. certified auditors, audit firms and independent auditors; and (iv) perform quality assurance reviews of audit firms, independent auditors and licensed certified Resources auditors. The available annual budget per member is approximately EUR 1,030. The CAA became an associate member of IFAC in 2014. The CAA’s main areas of strategic focus include Member Profiles enhancing the CPD and qualification program as well as developing the quality assurance system. 32% Internal Auditors 68% Profile Certified Auditors Funding Qualification programs 15% 26% 67% Industry / Sector Business sector Practicing 9% 65% auditors Membership 7% CPD programs fees Financial industry Licencing and 11% certification Gender 53% €1,030 Approximate annual budget per member 157 Governance The Chamber’s governance bodies consist of the General Assembly, the Governing Council, the Governance Bodies Supervisory Board, Secretariat, and three other Committees. The Governing Council is the executive Gender body of the Chamber and has seven members, six of whom are elected by the Assembly and one 55% member who is nominated by the Ministry of Finance. The Supervisory Board is the oversight body of the Chamber and comprises five members elected by the Assembly. Staff The Chamber currently has three other Committees: the Ethics Committee, the Quality Control Committee The CAA has nine full-time employees: the General and the Committee for Examination, Training and Secretary, two Administrative Assistants, three Continuous Professional Development. employees responsible for professional education and examination, and a further three staff who are involved The Secretary General manages and organizes the in quality control and assurance activities. day-to-day business of the Chamber. The Secretary General is appointed by the Assembly. Education and Training Program Enhancements to the professional education program are required. These could include specifying competencies which should be achieved through practical experience and prescribing learning outcomes and proficiency levels. Entry requirements education has been increasing and currently stands at approximately 50 admissions per year, with 27 All candidates who hold a university degree can enroll completing the program on an annual basis. in the CAA examination program. Content Demand The syllabus comprises the following courses: The demand for Certified Auditor professional Professional Education Level 1 Level 2 Theory and Principles of Accounting Law for Certified Auditors Financial Reporting Framework and IFRS Standards Tax Systems Financial Analysis Business Information Systems Managerial Accounting Microeconomics, General and Financial Economics Risk Management and Internal Control Financial Mathematics and Statistics Audit Theory Financial Management of Undertakings Audit Methodology 158 GOOD PRACTICE BOX Implementing sound integrity procedures for professional examinations The CAA has implemented a number of procedures ►► A double marking system applies whereby two in order to maintain sound examination integrity, examiners mark each exam paper independently; including: ►► Candidates can enquire into the marking of their ►► Each exam paper is coded and no names are paper and file a complaint; and exchanged, thus protecting student anonymity; ►► Pass marks are published on the CAA’s website. There is no prescribed order in which the exams must Practical experience be taken. Professional Ethics is included under the Audit Theory course. requirements The law requires prospective statutory auditors to The examination syllabus provides information about have three years practical audit experience in order the detailed subjects and the content of the subjects. to obtain an audit license, of which at least two years Learning outcomes and proficiency levels are not must be under the supervision of a statutory auditor. prescribed. It is the Ministry of Finance rather than the CAA The education program is self-study. Limited which monitors this practical experience requirement. consultations are possible with examiners before the This involves reviewing a signed statement by the exams. There is a need to develop further study and supervising statutory auditor and audit firm confirming practice materials to help candidates prepare better that a successful candidate has completed the for the examinations. necessary time in such a role. The CAA also offers the following specialized license: Internal Auditor. Candidates should have Practice license an undergraduate degree and need to pass an examination, as well as have practical work experience Successful candidates who have completed the of no less than three years of internal or external audit, examination program and the three years of practical or at least five years of experience in accounting. experience requirement can apply to the Ministry of Finance for a practicing license. Curriculum updates and reviews Recognition Serbian Law prescribes the competencies subject to examination. There is limited flexibility from the CAA’s ACCA members can obtain recognition of their ACCA side to introduce substantial changes other than qualification upon successfully passing the Tax and providing some minor updates to courses. Business Law exams. There is a formal system for the recognition of other IFAC bodies’ qualifications but candidates must provide Examinations evidence of the similarity between their IFAC body’s Pass rates are on average 62 percent and are published exams and those of the CAA. Passing the Tax and on the CAA’s website. Two examination sittings are Business Law exams is a requirement. available annually. 159 Continuing Professional Development (CPD) The CPD requirement is mandatory for all statutory auditors and is prescribed by law. Half of all CPD must be met by attending workshops or seminars organized by the CAA. There is a need to introduce an output-based CPD measurement system that would focus on the achievement of the learning outcomes required by the revised IES 8. Requirements CPD program The CPD requirement is prescribed by law. Each CPD Trainers are practicing auditors with not less practicing auditor is required to renew his/her license than five years of practical experience. CPD programs every three years by providing evidence of attaining 120 offered by the CAA include training on ISA, ethics, and hours of CPD. Recognized CPD units include attending regulatory and tax updates. Although technical topics or delivering training programs, publishing research, are covered, there is insufficient focus on developing and reading professional literature. Sixty hours of the soft skills and delivering industry-specific courses. required CPD must be achieved through attending workshops or seminars organized by the CAA. The remainder can be attained through participating CPD Courses in training programs provided by other relevant Professional institutions (e.g. universities, other professional bodies, 15% 65% employers training programs). Ethics Measurement Auditing The method for measuring completion of the CPD standards and requirement is an input-based approach. Members updates are issued a certificate of completion of CPD upon attending training sessions organized by the CAA. Members file these certificates with the Ministry Taxes and regulatory updates 20% of Finance when applying to renew their licenses. It is necessary to enhance the CPD system so that it focuses on the achievement of learning outcomes as required by IES 8. GOOD PRACTICE BOX Mandatory ethics training as part of annual CPD Considering the importance of professional ethics The CAA’s annual CPD programs include a minimum in the day-to-day work of professional accountants, of 15 percent dedicated to professional ethics annual CPD programs should have a mandatory training. ethics training update with a focus on ethical decision making. 160 Benchmarking Results The education program could be further strengthened through the introduction of more learning outcomes relating to Ethical and Professional Values and Commitment to the Public Interest. Further, areas such as Business Strategy and Management and Advanced Financial and Performance Management can also be enhanced to improve alignment against the IES and ACCA benchmarks. Syllabus Profile against IES Benchmark Certified Auditor SUBJECTS Audit and Assurance Business Strategy and Management Businesses and Organization Environment Commitment to the Public Interest Economics Ethical Principles Finance and Financial Management Financial Accounting and Reporting Governance, Risk Management and Internal Control Information Technology Management Accounting Professional Skepticism and Judgment 0% 20% 40% 60% 80% 100% 161 Syllabus Profile against ACCA Benchmark Certified Auditor SUBJECTS Accountant in Business Advanced Audit and Assurance Advanced Financial Management Advanced Performance Management Audit and Assurance Business Analysis Corporate Reporting Financial Accounting Financial Management Financial Reporting Governance, Risk and Ethics Management Accounting Performance Management 0% 20% 40% 60% 80% 100% 162 About the CFRR The Centre for Financial Reporting Reform (CFRR) analytical and advisory services; learning and skill based in Vienna, Austria, is part of the World Bank’s development; know-how and knowledge transfer; and Governance Global Practice and leads the World technical assistance to strengthen existing institutions. Bank’s corporate financial reporting agenda. The CFRR activities are focused on four areas of expertise: CFRR provides a range of knowledge, convening and i) raising awareness of the importance of the corporate capacity development services in support of financial financial reporting reform agenda and contributing to reporting reform, institutional strengthening and the legislative reform; ii) building institutional capacities dissemination of good practice in the area of financial by addressing knowledge gaps and offering tailored reporting and auditing. The CFRR supports global advice in areas such as public oversight and standards; clients to adopt and implement high-quality financial iii) encouraging strong and engaged professional reporting standards as a key element of strong accountancy organizations; and iv) promoting the corporate governance systems. development of internationally compatible accounting The CFRR provides knowledge services including education. Centre for Financial Reporting Reform Governance Global Practice The World Bank Praterstrasse 31 1020 Vienna – Austria T: +43 (0)1 2170-700 F: +43 (0)1 2170-701 cfrr@worldbank.org www.worldbank.org/cfrr 163 164 165