Home' Charter : 1111 Charter Contents November 2011 I Charter 59
Technical focus > Quality review program
The Institute sets the benchmark for ethical,
professional and educational standards,
working in conjunction with regulators
to uphold the integrity of the accounting
profession. The Quality Review Program
(the Program) is a key component in this
co-regulatory environment, assessing
whether Chartered Accountants in practice
have appropriate quality control policies
and procedures in place to comply with
professional standards and regulatory
The Institute releases the results of its
Program to members, regulatory bodies,
government and other stakeholders on a
regular and timely basis to keep members
and other stakeholders informed. It also
alerts members to the issues that need
As the Program matures it needs to evolve,
while continuing to add value to practices. In
2010, the thought leadership paper Quality
Review: past, present and future outlined
the Program’s direction and honed in on the
fundamental objective of adding value to
reviews while minimising duplication.
The coming year will see the Institute
implement an innovative review approach for
the major ﬁrms. Further, the Program will move
towards enhancing the review of ﬁnancial
planning services and insolvency services.
A BROADER REMIT -- THE
The Institute’s next round of quality reviews
of the major ﬁrms will introduce online
questionnaires to analyse each ﬁrm’s
approach to audit quality, designed to
establish whether the ﬁrm is responding
appropriately to drivers of audit quality.
An added beneﬁt is that this approach will
enable benchmarking between ﬁrms.
Individual audit ﬁles will not be reviewed
but reviewers will rely on the detailed ASIC
inspections and the national and international
reviews of the ﬁrms for audit engagement
analysis. Our focus in this area will be the
Maintaining standards is a continual, and evolving,
mission for the Institute.
Story Claire Locke FCA
remediation action the ﬁrms have taken
based on those reviews. We will continue
to review the engagement ﬁles for other
practice areas of the ﬁrms, based on a risk
assessment of the type of work undertaken,
and the extent of other internal and external
reviews of the ﬁrm.
By using, rather than duplicating, ASIC
and other inspections and sharing with
the ﬁrms benchmark data about their
responsiveness to drivers of audit quality, the
Program aims to provide ﬁrms with insights
into the effectiveness of their quality systems,
assisting them to promote internal attitudes
towards audit quality.
The Institute’s executive general manager
(members), Lee White FCA, says that
ultimately this approach will enhance audit
quality throughout the profession.
“This is a fundamental objective of our
commitment to the public interest. Already
this approach has highlighted an important
issue for accounting practices: the ‘work
readiness’ of accounting graduates. As an
identiﬁed driver of audit quality, the skills and
personal qualities of staff are crucial to audit
quality and hence the future of the audit
profession,” says Mr White.
To address this issue, the Institute has
teamed with a leading accounting academic
to explore the gap between university and
professional life for graduates. Our initial steps
will be to use the online questionnaires that
form part of our review program to collate and
analyse data on graduate employees and their
perceptions and development.
THE YEAR THAT WAS
September’s Annual Report on the Quality
Review Program: For the year ended 30
June 2011 summarises the results of the
past ﬁnancial year, based on the quality
reviews of practices ranging in size from sole
practitioners to national partnerships.
Overall results from quality reviews
conducted during 2010-2011 remained
consistent with 2009-2010 results. The
majority of practices (78%) were reported
to have either met all of the professional
standards and regulatory requirements as
set by standard-setters and regulators, or
showed levels of non-compliance that were
not regarded as serious.
White said while there is room for
improvement, the overall results indicates
practices are maintaining their commitment
“These results are pleasing in light of the
rapid pace of change to standards and
legislation in the period since their previous
review and the challenges of recent economic
conditions and natural disasters,” White said.
In-depth analysis of the 2010-2011
results reveals an encouraging trend, with
overall compliance with auditing standards
continuing to increase during the period, as
was the case in 2009-2010.
“The Institute takes the view that non-
compliance is preventable. We work closely
with members to promote continuous
improvement – via remediation, providing
Institute resources and services where they
are most needed, and using the results and
issues arising from the Program to inform
our advocacy with regulators and standard-
setters,” he stated.
to read the
Report on the
the year ended
30 June 2011.
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