Auditors, corporate accountants and financial officers who deal with information technology have always had a double problem: They have to be experts in their own fields, and they also have to know IT.
To help accounting and financial professionals talk with and understand IT professionals, the International Accounting Education Standards Board - an independent board within the International Federation of Accountants - has issued a proposed update of a standard that outlines the competences necessary for internal and public auditors who provide assurance on information systems, as well as managers and designers of such systems.
"The Education Board has long recognized the need for professional accountants to have an appropriate understanding of information technology," said IFAC technical director James Sylph. "But it's an ever-changing field, so this document is an update of an existing standard that tries to recognize some new things that are happening in the IT world."
Sylph said that the standard would, if adopted, determine the professional education requirements of IFAC member bodies around the world, including the American Institute of CPAs and the Institute of Management Accountants.
The proposed standard, issued as an exposure draft and titled Information Technology for Professional Accountants, pointed out that due to the essential and pervasive nature of information technology, all accounting professionals are not only users of IT, but are in some way involved in related assurance, management or design of information systems. The guidance is therefore useful not only to those people, but to those who hire them.
Nancy Cohen, the AICPA's senior technical manager of IT, praised the proposal as "a roadmap to the areas of required knowledge for today's CPA/accountant."
"All CPAs/accountants in every discipline need to understand IT," Cohen said. "They need to have a broad knowledge of technology issues that will affect their work, their clients and their employer."
The guidance points out that the role of assurance provider and evaluator is found in both the internal and external audit functions. Competences include not only technical knowledge, but the communication and interpersonal skills needed to support interaction with top management, IT users, steering committees and suppliers of IT services. An appendix to the guidance lists various competence elements, though the list is illustrative, not prescriptive.
"For qualification as a professional accountant, the expected level of competence for the role of assurance provider is knowledge and understanding of (but not necessarily proficiency in) the competence elements," the proposal stated. "This is evidenced by the ability to describe or explain the significance of issues related to the listed competences in a relevant business setting."
Sylph noted that comments received over the 90 days following the release would determine whether the IAESB has "the right stuff" in this document, and how the AICPA and IMA will change the syllabuses of their professional education requirements.
"This document is not suggesting that every accountant have a Ph.D level of knowledge in all areas of IT," Sylph said. "Rather, it says that every professional accountant needs to know these areas exist and know enough about them to talk sensibly with people who are more competent in those areas. If you are, for example, a chief financial officer in a company and you have an IT department, the IT guys are the specialists, but you need to be able to talk to them and have enough common language and understanding of what they do. This document sets the level of knowledge that you, as a professional accountant, will need to carry out that conversation sensibly and get the right information, whether you are the CFO or the auditor."
Comments on the exposure draft are requested by Nov. 15, 2006. Copies may be downloaded at www.ifac.org/eds.
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