Quality Review Report
Quality Review Report
Private and Confidential
To: Manager, Quality Review - Compliance
CPA Australia Ltd
PO Box 2820
MELBOURNE VIC 3001
Review CodeReviewer Name
Date Review Performed
Recommendation – Representation of Compliance*
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Version: August 2014
Quality Review Report
Scope
I have conducted a Quality Review (the Review) of the quality control system of the above member as at the above date. The member is responsible for the development, maintenance and implementation of the system of quality control. I have conducted the Review in order to express an opinion and make recommendations as to whether the member's quality control system provides limited assurance that the member and their personnel are conforming with professional standards and regulatory and legal requirements.
This report has been prepared solely for CPA Australia Ltd for the purpose of the Quality Review Program of CPA Australia Ltd. I disclaim any assumption of responsibility for any reliance on this report to any person other than CPA Australia Ltd.
My Review was conducted in accordance with the policies and procedures established by CPA Australia Ltd for Quality Reviews. My Review was limited to a review of the member's system of quality control based on information provided by the member and a review of the application of the member's quality control procedures in a selected sample of engagement files. My procedures included examination on a test basis of evidence supporting the member's assertions as to compliance with professional standards.
Recommendation
I recommend that before the member’s obligations under the Quality Review Program be finalised, that the member provides written representation that their system of quality control has incorporated changes such that the following areas of non-compliance have been rectified:
Non-compliance with
[List breaches here]eg APES 315.12.6 Compilation of Financial Information (do not leave this reference in if not applicable)
Reviewer’s Summary – Matters Leading to Representation of Compliance Recommendation
I have attached a summary of my findings which led to a representation of compliance recommendation being made, and of my recommendations for improvement. The member has reviewed the findings and the recommendations for improvement and any written comments of the member are also included.
Review Opinion
Based on my review, except for the deficiency/deficiencies described in the preceding paragraph(s), nothing has come to my attention that causes me to believe that, at the above date, the system of quality control of the member did not met the objectives of the quality control standards of the Accounting Professional and Ethical Standards Board (APESB) and that the member's practice was not conforming with relevant professional standards and regulatory and legal requirements.
Reviewer's Summary - Other Matters
I have attached a summary of my other findings, comments and suggestions in relation to other areas where I consider the member could enhance the quality control systems and/or the operation of the practice. The member has reviewed the summary, and any written comments of the member are also included.
Signed by Reviewer: / Date:[Print Name]
Signed by Member: / Date:
[Review Code]
* CPA Australia Ltd will review the report and the suitability of the recommendation
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Quality Review Report
Reviewer's Summary - Matters Leading To Representation of Compliance Recommendation
The following provides a summary of the findings of the review I have conducted which led to the representation of compliance recommendation. In my opinion, the breaches of mandatory professional standards that resulted in a Representation of Compliance Recommended report were caused by a deficiency in the quality control identified below.
Mandatory professional standard(s) breached / Deficiency identified and how, in the opinion of the reviewer, quality control policies and procedures could be improved. / Member commentsSigned by Reviewer: / Date:
[Print Name]
Signed by Member: / Date:
[Review Code]
Reviewer's Summary
Force of law
APES 320 has mandatory application upon members and practices providing accounting and other professional services to the public whether such services are assurance or non-assurance. Furthermore, the Auditing and Assurance Standards Board (AUASB) has issued revised auditing standards as legislative instruments under the Corporations Act 2001, effective for financial reporting periods commencing on or after 1 July 2006. For Corporations Act audits and reviews, those standards will have the force of law. To the extent that those force of law auditing standards make reference to the quality control requirements for firms issued by a professional accounting body, the requirements of APES 320 have the same level of legal enforceability as the explanatory guidance in which such reference is included in respect of Corporations Act audits and reviews.
Elements of a System of Quality Control
Members of CPA Australia Ltd offering Assurance services to the public are required to apply the whole of APES 320 Quality Control for Firms, as applicable to their Assurance Practice having regard to the six (6) Elements of a System of Quality Control that are specified in this standard. Firms that do not have an Assurance Practice, or the non-assurance parts of Firms with an Assurance Practice, are required to apply all paragraphs of APES 320 where applicable other than those boxed and designated ‘Assurance Practices only’.
Assurance Services
A service or engagement undertaken by a member with the purpose of adding credibility to a subject matter, in order to increase the degree of confidence of users of the subject matter. This is achieved by the member expressing an opinion on the reliability of the information in question.
For example, an audit is a type of assurance engagement the member undertakes in order to provide an opinion on the reliability of the information contained in the financial report. An internal control system assurance engagement is undertaken in order to provide confidence to the intended user, which may include banks, regulators or any other party requesting such a report, that the entity’s internal control system is appropriately designed and is operating effectively.
Examples of common assurance engagements are shown below.
Common Assurance Engagements may involve a member providing an opinion on the reliability of:
· A financial report (an audit)
· Prospective financial information i.e. prospectus, cash flow forecasts etc.
· Internal control systems
· Environmental performance
· IT Systems
· Performance measures
· Corporate governance
· Risk management systems
Reviewer’s Summary – Quality control
The following commentary is my summary of the observed compliance with the six mandatory elements of APES 320, being:
§ Leadership responsibilities for quality within the firm
§ Ethical requirements
§ Acceptance and continuance of client relationships and specific engagements
§ Human resources
§ Engagement performance
§ Monitoring
In addition, there is a requirement for quality control policies and procedures to be documented and communicated.
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Version: August 2014
Quality Review Report
Reviewer’s Summary - Other Matters
Included below are my comments arising from the review of a more general and/or educational nature; recommendations, suggestions for practice improvement and any other relevant commentary.
Member’s comments
2831499_1.doc 2
Version: August 2014