Quality review half yearly update reports positive results

Key Points

• Our Quality review update for July – December 2010 highlights the top line results for the six months to 31 December 2010
• Results reveal Chartered Accountants in practice are maintaining a high level of compliance
• The Institute provides members with guidance and tools to adapt to the changing audit environment as a result of the introduction of the Clarity auditing standards.

The Institute released the December 2010 half yearly quality review update today highlighting the top line results for the six months to 31 December 2010.  The update also outlines the proactive approach the Institute is taking to assist members adapt to the changing audit environment as a result of the introduction of the Clarity auditing standards.

Executive General Manager at the Institute, Lee White, expressed satisfaction with the half yearly result with 79% of practices reviewed meeting the professional standards and regulatory requirements of standard setters and regulators, or showing levels of non-compliance that were not regarded as serious.

'Our quality review program promotes consistently high levels of quality and service by our practitioner members. With the new Clarity auditing standards in place, it is our goal to assist members in practice adapt quickly to the changing audit environment,' said Mr White.

With the introduction of the Clarity suite of auditing standards, the Institute sent  a letter to practitioners to ensure they are aware of the Clarity standards, and importantly that the Institute has guidance and tools available to assist them.
 
Conducting quality reviews is a part of the co-regulatory role fulfilled by the Institute. The quality review program assesses whether Chartered Accountants in practice have appropriate quality control policies and procedures to comply with professional standards and regulatory requirements.

Overall results

During the six months to December 2010, we completed 224 quality reviews of practices ranging in size from national partnerships to sole practitioners (228 practices were reviewed in the six months to December 2009).  Overall results from these reviews remained consistent with 2009-2010. Of the reviews completed, 79% of practices 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 (80% in 2009-10).

In the remaining 21% of practices, we found more significant areas of non-compliance which meant we had to conduct a follow up review. This allows us to revisit the practice and ensure that all issues identified have been rectified (19.5% practices required a follow up review in 2009-10, with a further 0.5% being referred to the Institute’s disciplinary processes for investigation in 2009-10).

In-depth analysis of these results reveals an encouraging trend, with overall compliance, with auditing standards continuing to increase during the period, as was the case in 2009-10. Although some practices revealed an increased number of departures from standards in non-audit areas, these were relatively minor and predominantly occurred as practices adapted their policies and procedures to new standards. This highlights the need for the Institute to work with members on promptly adapting to new requirements.

Article last updated 13 March 2012