On 1 July 2016, International Education Standard (IES) 8, Professional Competence for Engagement Partners Responsible for Audits of Financial Statements (Revised), becomes effective.
IES 8 outlines the professional competence requirements for audit engagement partners, demonstrated by the achievement of learning outcomes. Engagement partners should therefore undertake CPD that develops and maintains the professional competence required for the role.
When is this happening? IES 8 (Revised) becomes effective on 1 July 2016.
Who does this apply to? IES 8 applies to the engagement partner responsible for audits of financial statements. During the development of IES 8, it was identified that this is a role that is common to every audit engagement. And from a public interest perspective, the engagement partner has ultimate responsibility for the performance of the audit.
What are the changes? From 1 July 2016, engagement partners should undertake relevant CPD activities, which include practical experience, to develop and maintain professional competence by the achievement of learning outcomes.
By focusing on the professional competence outlined in IES 8, engagement partners will be able to deal with complex situations, which help to:
contribute to audit quality
promote the credibility of the audit profession
protect the public interest.
What do I need to do? Engagement partners should do relevant CPD to ensure they develop and maintain the professional competence required for the role. Your CPD should develop:
a) technical competence b) professional skills c) professional values, ethics and attitudes.
What is the relationship between practical experience and CPD? CPD includes practical experience. As your career progresses, practical experience becomes increasingly important in developing and maintaining professional competence.
For example, through practical experience, an engagement partner may develop an understanding of an industry a client is operating in. This knowledge, obtained through practical experience, could be used to assess the business risks faced by the client’s organisation and to help inform audit risk assessments.
Further information about these requirements will be provided to members in due course. You can also find further information on IFAC’s website