Quality Assurance 2022

 

Quality Assurance 2022

Quality assurance reviews of CPA Audit firms are conducted in accordance with Bye Law 7 and the Companies Act 2014.

File Review Date

If you receive a notice for a quality assurance review in 2022 you will have received a date for the review of your firm’s engagement files (may include audit and non audit files). This review may be conducted onsite at your offices or in a remote fashion, depending on government advice re COVID 19 arrangements in place at the time. Such arrangements will be made with you in advance.

Advance Information Date

You will also receive a date by which you must submit advance information to CPA Ireland. The timely receipt of this information is important to ensure that your review is planned efficiently and effectively.
The advance information must be submitted to CPA Ireland electronically, and consists of the following;

  1. Completed pre-visit questionnaire: Please click here for form. 
  2. Full client listing. Please click here for client listing template . 
  3. Most recently completed firm Annual Compliance Review
  4. ISQC1 policy document
  5. Anti- Money Laundering policies and procedures for the firm
  6. Risk assessment of the firm and clients for AML purposes
  7. CPD records for all statutory auditors
 
Opening Meeting
Arrangements for an opening meeting to be held in advance of the file review date will be made with the practitioner. This meeting will be held remotely.
The following matters will be discussed at the opening meeting;
Practice Structure
  • Review of the pre-visit questionnaire, provided in advance
  • Client profile – full client listing provided with advance information
  • Firm staffing structure
  • Details of CPD attended by partners and all statutory auditors
  • Professional indemnity insurance
  • Practice accounts, fee income, aged debtors listing etc
  • Client bank account details and client ledger reconciliation where applicable
  • Partnership agreement/continuity of practice provisions
Audit Engagements
  • Audit client profile and listing
  • Quality control procedures in accordance with ISQC (Ireland) 1
  • Annual Compliance Review
  • Details of Audit programmes/ procedures/software etc
  • Internal procedures for employees to report potential or actual breaches of the EU Audit Directive and Regulation on statutory audit
CPD for Statutory Auditors
A review of CPD conducted by all statutory auditors in the firm for the previous 24 months will be conducted.
 
Details provided for review should consist of the following;
 
  • Record of CPD Planning for 2022 – this should provide for a reflection on the knowledge, skills and values required to competently fulfil professional responsibilities, identifying the learning and development needs and deciding on the CPD activities necessary to address them.
  • Details of CPD completed for the previous 24 months– this should demonstrate the completion of sufficient, relevant and appropriate CPD annually to meet the learning and development needs and the maintenance and enhancement of the statutory auditors’ knowledge, skills and values in all areas of work undertaken by the auditor.
  • Details of evaluation process conducted to support the maintenance of professional knowledge, skills and values at a sufficiently high level.

Records should be maintained for a period of 6 years to demonstrate CPD planning, completion and evaluation. The auditor should be able to demonstrate that through completion of CPD that they have achieved the learning outcomes in Table A of IES 8.
 
IAASA’s CPD Guidelines become effective from 1st January 2022
 
Anti-money Laundering Investment Business (IB) Activities (where CPA authorisation held)
•           Nature of investment business activities
•           Minimum Competency requirements (CPD)
•           Commissions, income from IB activities
•           Investment business files for client
•           Financial statements for the practice
 
 Review of Files

 

An indepth review of the files which have been pre-selected from your client base will be conducted by the Quality Assurance Executive (QAE). This review may be conducted onsite at your offices or in a remote fashion, depending on government advice re COVID 19 arrangements in place at the time. Such arrangements will be made with you in advance.
These files shall be examined to review compliance with the relevant financial reporting framework (FRS 102, S.1A of FRS 102, FRS 105 etc), the International Standards on Auditing (Ireland), Ethical Standards for Auditors and legal and independence requirements. In addition, as required by the Companies Act 2014, we will also review the fees charged and the adequacy of staffing levels for each audit engagement reviewed.

Closing Meeting

The findings of the review of the files shall be discussed with you and recommendations will be made where appropriate at the closing meeting. The QAE will complete a “Quality Assurance Summary of Results Sheet” which will outline the high-level findings of the review.
You may take a copy of this results sheet at this stage and will be invited to add any comments, in particular the purpose of the closing meeting is to:

  • Confirm the factual accuracy of the matters identified;
  • Note the firm’s initial responses including any proposed remedial action.

This is the opportunity for the firm to ensure the facts are accurate or provide additional evidence to record the correct position.
This results sheet will then be signed by the QAE and counter-signed by you and returned.
If you wish to provide any following up information such as details of how you will address any weakness you may do so within 10 days.

 

Outcome of the Review

The QAE will not be in a position to issue a final outcome or grade at the closing meeting. All visits are subject to an internal quality review process which assesses the outcome and grade to ensure consistency.

You will be informed in writing of the grade and outcome of your review.
There are four possible outcomes to the review in accordance with Bye Law 7 as follows


1.         ‘A’ - no follow up action necessary. In this case you will move on to the next six-year cycle.                                             
2.         ‘B’       - some follow-up action will be required within a specified period (1 to 3 months) to address areas of weakness identified.
3.         ‘C’       - where a significant number of areas of weakness or more serious problems are identified a re-review will be carried out within 18 months.
4.         ‘D’       - where serious problems are identified, immediate referral for further action which may include referral to the Director of Professional Standards and/or Investigation Committee
Further quality assurance information may be found here.