Following recent quality review results from the first six months of this financial year, the Institute has written to members in public practice to highlight areas of non-compliance, particularly around audit.  
 
The reviews suggest that audit conclusions appear sound, however they also suggest that files did not always contain sufficient audit evidence, and work was not always documented thoroughly, as per the current Australian Auditing Standards.  
 
The Institute has taken a strategic approach to addressing this issue. Its education program includes a range of tailored guidance for auditors, along with an ongoing training and development offer. Meanwhile, quality reviews continue to have a strong focus on audit, to both identify non-compliance and ensure that any non-compliance is addressed. 
 
Any breach of standards is considered serious by the Institute and by regulators (including the Australian Securities & Investments Commission (ASIC) and the Australian Taxation Office) and the standards setters (the Australian Auditing & Assurance Standards Board and Accounting Professional & Ethical Standards Board). Penalties can be applicable for non-compliance and any ‘Corporations Act audit’ is subject to the full force of law. 
 
The Institute has emphasised to members that they should not offer and undertake audit services unless they are committed and equipped to meet auditing standards.  
 
Which practices have been reviewed recently? 
Practices are reviewed by the Institute on a three or five year cycle, irrespective of their size. From 1 July to 31 December 2008, the Institute reviewed 242 practices (mostly small-to-medium sized). This did not include the firms which had been subject to recent reviews by either ASIC and/or the Audit Quality Review Board (primarily the Big 4 and certain other larger firms). Details of these other reviews can be read at www.asic.gov.au and www.aqrb.org.au 
 
Relevant links: 

• The Institute: Quality Review web page