ICAS syllabus: Changes to the way we train
Mark Allison CA and Mark Hoskyns-Abrahall CA speak to Robert Outram about educating future business professionals.
This year will see the launch of a major change programme for the CA syllabus, starting this September with the addition of significant new elements covering Business Acumen and Public Trust. The aim is to ensure that the CA training continues to be highly respected and relevant in today’s fast-changing world.
The new look syllabus will also reflect the three key themes of Technology, Trust and Talent as set out in the CA Agenda initiative, launched in March this year (see The CA, April for more on this).
The CA spoke with Mark Allison CA, Executive Director, Education with ICAS, and Mark Hoskyns-Abrahall CA, Office Senior Partner, Edinburgh with PwC and Chair of the ICAS Qualification Board, about the changes and why they have come about. The interview was a follow-up to the launch of the CA Agenda at St Paul’s Cathedral, during which Mark Allison outlined the key changes to the ICAS course content.
What’s driving this change, and why does the syllabus need to change?
Mark Hoskyns-Abrahall: There are three things. First is the unrelenting pace of change and the impact that technology, in particular, is having for business at large and specifically on the accounting profession. The second is around the whole debate on trust in business.
The third thing is partly a response to a challenge set down by Past President Sir Brian Souter, who asked how we can best bring “Business Acumen” into the training for future CAs.
Presumably some of this is also based on talking to employers, including accountancy firms, and asking what it is that they want from their trainees?
Mark Allison: There’s a research agenda that we have taken part in, and are now looking at the results of, on the role of accountants and auditors. It includes looking at what other institutes are considering around the world, and we have also looked at what accounting firms, large and small, need from their people.
The material that we’re putting into the syllabus includes, for example, data analytics, new auditing tools and the requirement for scepticism and a critical mindset. These are all themes identified by employers, regulators, academics and researchers over the last few years.
We aim to ensure that the CA course will be attractive to the next generation of students, and that the skills and knowledge they will gain are relevant to employers of all sizes.
So, to look at the new syllabus subject by subject, what sort of things are students going to be doing under the Business Acumen course that perhaps they haven’t been doing in this way before?
Mark Allison: The big difference is that the new Business Acumen course is at level one, the Test of Competence (TC), which students who are, typically, just leaving university will undertake. We’ve always had a strong theme of commercial awareness in our final year case study. By bringing business acumen, commercial awareness and initial entrepreneurial skills into level one, we’re ensuring that students have a basic grasp of the principles of how a business operates: competition, opportunity, risk, and how it makes money. By doing that, we hope the students then will be more relevant when they start in the workplace.
Mark Hoskyns-Abrahall: At PwC, many of our CA students have done accountancy and business qualifications but many haven’t, and the sooner we can get them thinking about business models, and understanding how clients and businesses make money, the better.
Moving on to the Test of Professional Skills [TPS] and the new Risk and Technology elements, can the course material stay up to date if you enshrine it in a syllabus? How quickly do things move and how much reviewing would it need to keep it up to date?
Mark Hoskyns-Abrahall: The quote that I often use is, “The pace of change will never be slower than it is today.” Some of the tools and methodology that we’re applying today have changed a lot in the last three, four or five years and that is going to be a challenge. However, I think coupled with that is a change in mindset about how to go about approaching an audit, understanding the risks that exist around data, extracting it and handling it. Some of these skills won’t change particularly quickly even while the tools might.
ICAS changes its syllabus every year, so in the area of Risk and Technology we’ll be looking to ensure that we’ve got up-to-date case studies, new lessons that are being learned, and excellent examples of disruptive technologies as well as the opportunity and risk involved.
Information technology issues, from blockchain to cybersecurity, are central to business and the future content of the CA course will reflect this.
“One of the important features of the CA qualification is that it is recognised around the world”
Mark Allison: New audit technologies produce data in different forms, so one of the other main themes coming through TPS will be to increase the level of skills in using quantitative information, and in explaining the output of the use of quantitative tools to non-experts. We think our students should therefore be very well placed to be able to brief colleagues in an audit team and to brief clients. We’ll be teaching them to take something complex and present that in the most effective way.
Most accountancy qualifications today include less on quantitative methods and statistics than in the past, and what’s become clear to us in the research is that that’s a potential weakness. We’re going to bring back some of the basics around quantitative methods at level one. We’ll cover the applications around forecasting and modelling at level two; and then we will bring the presentational techniques into the final level. So, it’s not about bringing in one element of quantitative methods as a standalone subject, but about covering this theme right through the whole syllabus.
Mark Hoskyns-Abrahall: Increasingly, it’s not just about the finances. It’s also about some of the non-financial measures and KPIs [key performance indicators] and the data that companies are asked to publish, such as information on the gender pay gap or on the environmental impact of the business. There is an increasing demand for the provision of some comfort or assurance over some of these.
Mark Allison: There are wider assurance asks being made in our professional services firms, many of which involve looking at future information. So, one of the other themes that we brought through into TPS is forecasting and modelling as a new subject area alongside our strategic finance course. The importance of being able to assess assumptions, look at sensitivities and build that into a forecast that can be trusted or assured will become more and more important. Most professional accountancy qualifications are relatively weak on that.
Moving on to tax in the TPS, are there any differences in the way that that’s going to be approached?
Mark Hoskyns-Abrahall: “Taxation” will be “Business Taxation”. It will focus on tax and how that impacts businesses. We’re looking to educate the professionals of the future around business and tie this in with the Business Acumen agenda.
Mark Allison: Business Taxation will bring together everything to do with employees, from national insurance to residency rules for foreign nationals in the UK; transactions taxes and corporate tax, partnerships, sole traders and other entities.
Meanwhile, personal taxation will be covered at the Test of Competence course at level one and that will ensure that all CA students, very early on, understand the basics of personal tax. Ethics has always been, in some shape or form, part of training to be a CA. Is the Public Trust theme a bit more specific than that?
Mark Hoskyns-Abrahall: We’ve been on quite a journey when it comes to this area. One of the things we’ve done this year is that students will be sitting an Ethics exam separately to TPE at their final paper. That was principally done to underline to our students the importance of that topic, which goes to the heart of being a CA. The public interest aspect of ethics is part of all of the discussions that are going on at the moment around the profession, business, and the role that business plays in society. ICAS has done a lot of great work around this.
The Power of One [the ethics initiative launched by ICAS in 2015], goes to the heart of that. As a CA, when confronted with challenges you have a responsibility to stand up and sometimes you might find yourself being the only person at the table raising your hand and saying “no”.
Mark Allison: There is a factual element to ethics, in terms of understanding the legal framework,
the governance requirements that are placed on companies and directors and so on, but it’s also important to bring that to life with real examples.
A lot of our students won’t necessarily have been confronted by a major ethical challenge, and so being able to draw on examples of experienced CAs through case studies is important. We’re also looking to draw on big, real life cases and have a discussion around the ethical challenges, and public interest issues, around them.
And these will be real life examples that people might have heard of, or can look up, rather than just giving some abstract examples?
Mark Allison: Yes. We’ll be explaining to students why Public Trust has reached the point on the agenda that is has. Part of the reason is the cases that have been publicly concluded in the last three to four years. That creates a wealth of case study material that we’ll be able to use to illustrate the judgments that were undertaken in certain circumstances, to assess the effect on stakeholders, and to discuss with students how alternative judgments might have been reached.
Because this material is very current, we’re bringing it into the course programme in 2019 and students coming to sit their final examinations for 2019 will take the Business Ethics paper, potentially with Public Trust content in it.
Mark Hoskyns-Abrahall: There’s clearly a whole range of issues in relation to the role of auditors. Firms like my own are responding to that, but it’s not just about auditors. It’s much broader than that; it’s about company directors and business leaders as well.
As we’ve gone through this, the research that Mark talked about and everything else, we’ve done a lot of consultation with employers and others, and certainly from what I’ve seen, the reception has been unanimously positive. We’ve received lots of encouragement to get on with it because all of these things are really important, and there’s real demand out there. ICAS, as an institute of just over 20,000, has been able to move at a pace that is faster, I believe, than other institutes have been able to.
As an institute of just over 20,000, ICAS has been moving at a pace that is faster than other institutes”
So what happens when?
Mark Allison: We’ll be bringing in the first of these changes for the 2019 syllabus which students will first start to study in September 2019 in the areas of Business Acumen and Public Trust; and we’ll be bringing all of the other material into the syllabus starting in September 2020. Where we have new case study material, we will aim to integrate that into the pre-existing syllabus for current students as well.
And obviously in all of this, the CA remains the “gold standard”?
Mark Allison: Yes. The qualification sits at Masters level on the Scottish Credit and Qualifications Framework. SCQF and both our TPE level [final level] and our TPS level are at Masters level in that framework. We will continue to set the examinations at exactly the level we always have done, and as a SCQF credit rating body we are independently assessed each year.
One other major aspect of the changes we’re bringing in concerns the relevant practical experience that students undertake in the workplace. Our research has shown that we need to reconsider areas around “questioning mindset”, “critical appraisal”, “understanding of behaviours and cultural factors”, “using a sceptical approach” and also “considering bias in answers”. The latter point refers to understanding the position of a person who is presenting you with information and understanding the context, and the drivers that may lead them to give a particular answer. That’s a difficult thing to put into the classroom, but I think it will be very important for a CA, in their career, to be seen as somebody who can understand how other individuals work.
With the research that you’ve done, what’s your sense of where ICAS is in terms of accountancy bodies globally? Is ICAS in the vanguard or following the pack?
Mark Allison: One of the important features of the CA qualification is that it is recognised around the world by other major accountancy bodies, and we are involved with a number of international groupings where we make sure that our qualifications are in the same broad space. ICAS is one of the leaders in that work.
I know, from my own experience of working with my counterparts in the other institutes, that they are considering changes in some of these areas. Time will tell how quickly others can change, but at ICAS we are moving forward as fast as we can. The syllabus changes will affect CA students, but members looking at their own continuing professional development (CPD) might find that some of the content we’re putting into the qualification may be
of interest to them.
Mark Hoskyns-Abrahall: The only other thing I would add is that, having been involved with the Qualification Board for a number of years, I feel that the encouragement from Council around this is at a level I’ve not seen before. We’ve always enjoyed support and interest from Council, but now this is at the core of ICAS’ strategy and Council is right behind it. This is important.