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IFRS 17: The challenge in training and education

A perspective from Brazil

As observed in several countries, the deferred implementation of IFRS 17 to 2023 brought some relief to insurers in Brazil. As the local regulator has not yet approved the standard, companies required to report only according to the local standard also have more time to adopt the IFRS 17 concepts. In conversation with our clients, we observe that one of the main challenges of applying the new standard is having people ready to work with it. Based on a PwC survey conducted in Brazil at the end of 2020, 74% of the participants reported that having people with necessary qualifications in IFRS 17 is a challenge with a high impact on their business. 

 

My experience in training and education

I have been interested in working in accounting research since college. This was the main reason that I took a master’s degree and PhD. But along the way, I became interested in delivering accounting education and training. I find the exchange of experiences and the transmission of knowledge rewarding. Today, in addition to being Director of accounting advisory services at PwC Brazil and working on IFRS implementation projects, I am involved in educational activities and lecturing an MBA course in São Paulo.

Explaining IFRS 17 has always been a challenge. Every time I talk about it, both internally and in client forums, I worry about the best way to pass on this content. It is a challenging and complex content for those who do not have much contact.

What clients are doing about IFRS 17 training and education

In these COVID-19 times, I have really missed being with clients, having lunch or coffee with them. As we no longer have face-to-face meetings, I booked a hangout meeting with one insurance company client.

Some comments that I found important to emphasize about the training of IFRS 17:

  • The company has been having training provided both by consultants and in-house training. These have been attended by actuarial, accounting and finance teams.
  • There is currently a difficulty in having groups that have homogeneous knowledge about IFRS 17. This is because some are already directly involved with implementation projects, whilst others not so much.
  • The most efficient way of transmitting content is to bring practical examples of policies and contracts negotiated by the insurance company. Consider the different lines of business that the organization might underwrite and the various contract durations that might exist. Highlight the “before” and “after” accounting events (debits and credits).
  • Continuing education on the subject has been one of the essential pillars of the implementation project - this hasn’t been a one-off activity. In this specific insurance company, they have full support from senior management to develop these training opportunities. Management gave this responsibility to the accounting team. They have formed an internal study group to discuss aspects of the standard and answer questions on IFRS 17. This group has also been discussing with the new products department the effects of adopting the standard in their new product strategy.

Out of curiosity, I did a quick search on the quality of accounting education. The authors of the article Quality in Accounting Education: What Say the Academics, gave some metrics for quality in teaching accounting. In bringing this to the business world and to our role as consultants in passing on knowledge to our clients, the two attributes of quality teaching that caught my attention were: ‘empowering the learner’ and ‘transformation of the learner’.

Transformation is related to empowerment. And in this sense, people who are empowered feel their tasks are meaningful, they are competent to perform them, and their efforts have an impact. This is essential for good work performance and execution of successful projects. So, it is crucial to make the content as simple and straightforward as possible. Work with examples that are part of the companies’ daily life. Worry about the language and how the content is transmitted. Get involved and feel part of the project. These have been my main concerns in order to achieve the attributes that empower and transform the learner, which, in my opinion, are among the most important.

 

Author: Gisele Sterzeck, PwC Brasil partner.

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Gisele  Sterzeck

Gisele Sterzeck

Sócia, PwC Brasil

Tel: 4004 8000

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