Quality Assurance Process

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. One aspect of the quality assurance process is an on-site visit to all firms.

Please watch  our webinar on the Quality Assurance Process for more information. 


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 or other regulatory history.
 

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. 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 exceptional circumstances and must be applied for in writing. Supporting documentation may be requested.
 

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 Format Will the Visit Take?

A quality assurance review is the responsibility of the compliance principal and will normally take the following format:
  1. An opening meeting with the compliance principal
  2. A review of files
  3. A closing meeting with the compliance principal


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.
 

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.
 

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.