Quality Assurance Programme
The Quality Assurance process ensures that all member firms of CPA Ireland maintain an appropriate level of professional standards in the performance of their duties and in the provision of services to clients.
Quality Assurance is conducted in accordance with Bye Law 7, Quality Assurance and Companies Act 2014.
In line with current Government advice regarding COVID-19 work restrictions, this process is currently being conducted remotely.
How are Firms Chosen for a Visit?
CPA firms are selected for a Quality Assurance visit on both a risk and random basis. The criteria used for risk selection include number, size and nature of audit engagements retained, the firm’s previous quality assurance, disciplinary, licensing, CPD or other regulatory history.
What aspects of the firm’s activities will be reviewed?
There are two/three essential parts to this review:
1. Review of your Practice and Audit activities in accordance with Companies Act 2014 and Bye Law 7
2. Review of your Anti- Money Laundering processes and procedures in accordance with Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended.
3. Review of your Investment Business Activities in accordance with Bye Law 14 and the Investment Intermediaries Act 1995 as amended.
How Often Can a Firm Expect a Visit?
All CPA audit firms will be selected for a Quality Assurance visit at least once in a six year cycle in accordance with Companies Act 2014. This is a statutory requirement and review dates cannot be facilitated beyond the six year anniversary date of your firm’s last review.
Firms granted audit registration for the first time will be listed for an initial Quality Assurance Review to take place within the first eighteen months of operation.
Non-audit registered firms are reviewed on a ten year cycle.
Who Will Conduct the Visit?
The visit will be conducted by Quality Assurance Executives from the Professional Standards Department of the Institute. These are qualified accountants with relevant audit practice and regulatory experience.
Will the Firm Get Notice of a Visit?
Upon selection for review, a notice with a date and details will issue to the Compliance Principal of the firm by e-mail. The minimum period of issue of a notice of a review is four weeks. A postponement of a review can only be granted in very exceptional circumstances and must be applied for in writing. Supporting documentation may be requested.
The Quality Assurance Review notice will advise the firm of the date that the review of a selection of engagement files will be conducted.
What are the arrangements to be made in terms of a remote review being conducted?
In line with government advice regarding COVID-19 work restrictions, the review will be conducted remotely.
In summary the review will consist of opening and closing meetings and a review of files and information provided by the firm.
These meetings and file reviews will be conducted virtually and you will be required to make arrangements for the transfer of information and the files selected for review, in advance of the review date.
What Information must be provided in advance of the review by the Firm?
As part of the Quality Assurance process you are required to fill out a pre-visit questionnaire which you will find on our website (click here to navigate to our related website page where you can find the questionnaire under the “Links” heading).
This must be returned 7-10 days in advance of the review date together with a current client list.
Following a review of this the Quality Assurance Executive will then contact you to discuss and to advise you of the files chosen for review.
Further advance information is also required and may be provided with the files chosen for review. Details of such information may be found by clicking here to navigate to our related website page (where you can find the advanced information required document under the “Links” heading).
Arrangements must be made to have all of the files and information provided to the Quality Assurance Reviewer at least one day in advance of the review date.
How can the information and files be made available?
There are a number of options available for the secure transfer of files and information to the Quality Assurance Reviewer such as:
- Files may be sent remotely/electronically.
- Files may be sent by post/courier.
- Files may be delivered to the Quality Assurance Reviewer by arrangement.
What is the Scope of the Review of an Audit Firm?
The scope of the Quality Assurance Reviews of audit firms, supported by adequate testing of selected audit files, shall include an assessment of:
1. Compliance with applicable accounting standards issued by the Financial Reporting Council (FRC) or the International Accounting Standards Board (IASB) as relevant, all auditing and ethical standards issued by the FRC or IAASA as relevant and all quality control standards issued by the FRC or IAASA as relevant and the applicable Code of Ethics and relevant legislation.
2. The quantity and quality of resources spent.
3. The audit fees charged; and
4. The internal quality control system of the Statutory Audit Firm.
5. Compliance with the Institute’s Bye Laws.
6. Confirmation of information provided on annual returns and pre-visit questionnaires.
7. Other regulatory matters such as complaints made to the Institute, claims made against the Firm, etc.
8. Compliance with obligations as a designated person under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended.
What is the Scope of the Review of a Non-Audit Firm?
The scope of the quality assurance reviews in Non-Audit Firms, supported by adequate testing of selected client files, shall include an assessment of:
1. Compliance with applicable accounting standards, ethical requirements and relevant legislation.
2. The internal quality control system of the Firm.
3. Compliance with the Institute’s Bye Laws.
4. Confirmation of information provided on annual returns and pre-visit questionnaires.
5. Other regulatory matters such as complaints made to the Institute, claims made against the Firm, etc.
6. Compliance with obligations as a designated person under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended.
What Happens at the Opening Meeting?
This is a meeting with the Compliance Principal to discuss the structure and operation of the practice and the nature of the services offered to ensure that the practice operates within the authorisation levels granted. A firm’s annual compliance review and their policy document prepared in accordance with ISQC 1 will be discussed.
This opening meeting may be facilitated by phone or video conferencing facility. This will be arranged with the practitioner in advance.
What Files will be Examined?
A number of files will be chosen from the client list including audit, compilation engagements including audit exempt files, correspondence, tax, secretarial, permanent and investment business files in advance of the review.
What Happens at the Closing Meeting?
The findings of the files reviewed will be discussed and recommendations made where appropriate. A grade is then awarded which will determine next steps with the review process.
Will the Firm Know the Outcome of a Visit?
Generally, the firm will be informed of the outcome on the day. Sometimes, it may not be possible for the Quality Assurance Executive to arrive at a conclusion on the day of the review and further information may be requested.
Will the Firm get a Follow Up Report?
A full report on the findings of the review will issue to the firm. Whilst the review may identify both strengths and weaknesses in the operation of the firm, the report will focus on the areas of weakness which need to be addressed by the firm.
What is the Likely Outcome of a Review?
The Quality Assurance Executive may award the following grades following a Quality Assurance Review.
‘A’ - no follow up action necessary.
‘B’ - some follow-up action will be required by the Firm within a specified period to address particular areas of weakness identified, with a view to achieving a Grade A.
‘C’ - where a significant number of areas of weakness or more serious problems are identified a full re-review (see below) may be carried out at an interval to be determined by the Quality Assurance Officer(s) (normally between 6 and 18 Months). The Director of Professional Standards or the Quality Assurance Manager may deem an onsite visit unnecessary and may direct a more appropriate action in accordance with Bye Law 7.16.3.
‘D’ - where serious problems are identified, the matter is referred to the Director of Professional Standards who may take any action in accordance with Bye Law 7.16.3 as a matter of urgency.
Will an Onsite Review of my Investment Business Activities also be conducted?
If the firm is authorised by CPA for investment business purposes then an onsite review of the firm’s investment business activities will also be conducted to ensure that the activity is conducted in accordance with Bye Law 14, Investment Business Regulations.