BLOG: Practice Review Time - Common Themes

Kirsten Hawke

In the July 2013 edition of the Chartered Accountants Journal there is an interesting article by Robert Manktelow regarding common themes that the Institute notes during Practice Review. For the full article, please click here for the link.

BLOG: Practice Review Time - Common Themes

< /br>Below are some key points from the article:< /br>

    < /br>
  • General practitioners need to have a good awareness of Professional Standard 1 Quality Control and Professional Standard 2 Client Moines (if handling client monies). Practitioners should have a Quality Control Manual. The manual should not be generic but should be tailored to your practice and your processes. How do I ensure the quality of my practices work? What are my risks? How do I manage them? With regard to client monies, common problems noted by Practice Review include taking fees from tax refunds without authority, client bank accounts accessed without proper authority and failure of control, including no reconciliations.
  • < /br>
  • Lack of adherence to Service Engagement Standard 2. More specifically engagement letters that are absent or out of date, compilation reports that are absent or not complying, insufficient documentation and disclaiming when not permitted to do so i.e. when also responsible for the financial statements such as when a trustee.
  • < /br>
  • Assurance. Practitioners undertaking such work must ensure that their technical knowledge is up to date and that their work complies with the standards. Review engagements are another area of weakness. A review requires evidence through enquiry and analytical review procedures.
  • < /br>
  • Issuer Audits are only able to be performed by a licensed auditor. They also require an Engagement Quality Control Review. From 1 July 2012, if a practitioner (who is not a licensed auditor) completes an audit of an issuer they will have breached the Auditor Regulation Act and may be subject to a fine of up to $50,000.
  • < /br>
  • Trusteeships. How can a practitioner in good faith, attest for the truth and fairness of a set of financial statements when signing them as trustee when he or she has put a disclaimer on them as compiler?
  • < /br>
< /br>www.business-buddy.co.nz

Kirsten Hawke