Lessons learned 103 

Useful lessons gained from the experience of Denmark that would be useful for other countries:

• Changes in accounting regulation have an impact on the requirements in supplying new competencies. Ensuring a sound understanding of any given country regulatory context is a critical and integral part of understanding the impact of accounting regulation on the human capacity requirements. For example, a country like Denmark employs more people in the various accounting related roles that work with the Danish Financial Statement Act (2009) accounting requirements as opposed to IFRS/ISA.

• Changes in audit regulation have an impact on the competency requirements for candidates that train to become State-authorized auditors. In all countries it is essential to comprehend the interrelation between the mandated audit requirements and their impact on human capacity. Identifying how many companies that are mandated to undergo audit or audit-light (hence requiring a State-authorized auditor) is a good indicator of human capacity need for audit practitioners.

• In Denmark the CMA plays an important role in the continuous supply of competencies in accounting and audit. The Danish case has shown that the establishment of an academic programme as a mandated part of the supply of State-authorized auditors not only serves to educate auditors but also has a spill over effect to the other accounting roles in the human capacity chain of financial reporting. In addition the mandated requirement of an academic programme has stimulated communication on human capacity requirements between the PAO (FSR Danish Auditors), the universities and the professional accounting firms.

I. Conclusions and outlook

This case study suggests that to capture the human capacity development needs it is necessary to fully understand the regulatory requirements and their inherent complexities in the country. Regulatory requirements in both financial reporting and auditing will have a bearing on determining the development and maintenance of human capacity in these areas. Therefore in the area of financial reporting, accounting and auditing in any given country context, one needs, as a starting point, to understand the supply and demand landscape for audit and financial reporting/accounting services. This would involve a careful mapping and analysis of the regulatory requirements together with quantitative analysis that identifies the number of companies in a country that have to meet the various levels of accounting and audit requirements. It has, for example, been illustrated that in Denmark, by far the largest number of companies are to comply with national accounting legislation (as opposed to IFRS/ISA) and that the requirements of mandated audit for companies have been reduced during the last decade. Making this analysis will hence provide an indication of the amount of human capacity (i.e. number of

people) and the corresponding level and type of education required, to ensure a viable supply of capacity into the financial reporting supply chain.

Building adequate human capacity for high-quality reporting

In the Danish case the CMA is a critical component in building and maintaining human capacity in the area of financial reporting. As illustrated in this case study, the master’s degree delivers candidates not only for the process of becoming a State- authorized auditor but also for roles such as chief accountant, controller, CFO and other related roles. An important factor in forming the content of the CMA is the continuous collaboration between the FSR Danish Auditors, the professional accounting firms, the regulating institutes and the academic institutions. This collaboration is simply established through regular meetings where curricula, student culture, regulatory requirements and other issues that are relevant to the profession are discussed and agreed upon. An advantage of collaboration with academia is ensuring that the profession is continuously updated on new developments in research into financial accounting and auditing.

Ensuring harmonization between national education curriculum and international requirements

In Denmark this is done on a continuous basis. Denmark has a clearly defined regulatory system for the education and qualification of State-authorized auditors that is governed by the Danish Commerce and Companies Act. The collaboration between academic institutions, regulators, professional firms and FSR Danish Auditors stimulates and strengthens this process.

Linkages between quality assurance of audit practice and the education of accountants and auditors and education for specialized areas

It is likely that a country like Denmark can continue to strengthen its human capacity-building in the area of financial reporting by increasing the linkages between findings of the Danish Oversight Institute with the education of State-authorized auditors. In addition the competency framework for accountants and auditors who seek to specialize in the public sector or CSR should prospectively get more educational opportunities in these areas.

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