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Quality review: results show room for improvement
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The Institute’s 2008 Annual Report on the Quality Review Program was published today. The report contains top-line results and trends from the 480 quality reviews completed during the financial year ended 30 June 2008. The practices under review ranged in size from national partnerships with multiple offices, to individual offices with a sole practitioner. 
 
Members are advised to take particular note of the more common non-compliance issues identified in reviews. The Institute will be closely monitoring these issues during future quality reviews.  
 
Overall results 
The following reports were issued after the 480 reviews were completed:

  • No departures from professional standards: 16.5 per cent
  • Departure(s) from professional standards, not classified as serious: 72 per cent
  • Follow up review required: 11 per cent
  • Referral to the Institute’s disciplinary processes for investigation: 0.5 per cent.
Audit documentation must improve 
Based on last year’s results, the main concern was a lack of documentation in relation to either the audit opinion issued (resulting in a follow-up review) or insufficient documentation in a particular audit area (requiring confirmation that the issues have been addressed). While the substantial majority of files included sufficient audit evidence to support the conclusions reached, there were some instances where this was not adequately documented.  
 
Where documentation was inadequate, the auditor had failed to document all the work they had done in order to reach their conclusions.  
 
Members are reminded that the Institute has a suite of audit tools and guidance available.  
 
Independence documentation is an issue 
Documentation was also a concern for some practices in relation to independence, where reviewers found no documentation or inadequate documentation of threats to independence. 
 
The Institute, with the other accounting bodies, today published an extensively revised and updated Co-regulatory Guide to Independence, to provide consistency and support in the practical application of independence principles.  
 
Quality control systems are mandatory 
Practices with documented quality control systems generally perform well in reviews. Documented control systems are pivotal to assuring quality as they formalise a firm’s organisational structure, policies and procedures. 
 
The Institute’s comprehensive, interactive Quality Control Guide should be tailored to individual practices, to help members meet their obligations under APES 320: Quality Control For Firms. 
 
Relevant links:  
 
 
Last updated: Thursday, 11 September 2008