[a reprise of
the revised quality standards regime within AGN]
by Nick Blake, CEO, AGN International Ltd.
Some eighteen months ago the Board of Directors of AGN
International approved a revised structure within the
organization to oversee the professional quality standards
within our association. This structure introduced the
concept of Quality Assurance Committees (QuAC) on both
a regional and worldwide basis.
Today,
there are six QuAC's in operation, five on
a regional basis, reporting to a Global QuAC, which in
turn reports to the International Board. The responsibilities
of these bodies are set out in the AGN Operating
Guideline 23: Quality Assurance Structure, but basically they relate
to the operation of assurance reviews within the regions
and the updating of members on new international professional
auditing standards.
In
its first face-to-face meeting held in December 2004,
the Global
QuAC agreed that there should be a common yardstick
to judge member firms' quality levels. This would
be applied throughout the association to provide the necessary
confidence to all member firms that reliance could be placed
on the work of all other member firms.
To achieve this, three requisites were laid down for a
revised approach to the then in-house assurance process:
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minimum
expected quality levels be laid down for firms
to adhere to |
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a
tool be developed to ensure that these quality
standards be adhered to |
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the
abilities of member firms be known and the membership
at large be informed |
These
requisites have been achieved through two separate
actions, as follows:
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the
review of all AGN Operating Guidelines relating
to quality issues
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|
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the
commissioning of a revision to the then Quality
Assurance Manual (QAM) which had been in operation
for a number of years and was being used as the
basis for conducting individual firm peer reviews
for both pre-admission and cyclical review purposes
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Firstly, an exercise was undertaken to review the four
Operating Guidelines relating to quality, namely Operating
Guidelines 14, 18, 19 and 23. They
were revised accordingly to reflect current professional standards, and
reissued to the membership. Secondly, the QAM was redesigned to firstly, reflect
the change in approach in the assurance process which was
to highlight the abilities of member
firms and inform the membership of those abilities, and secondly, to recognize
that not only auditing services should be reviewed as part of the assurance
process,
but also the other services performed by member firms.
This
was deemed to be especially important in light of the
intended change
in AGN's byelaws to admit firms
other than accounting ones as full members of our association.
The
redesign of this manual has resulted in it now being
in a modular
format. It comprises now of eight
separate modules, three relating to general matters (an introduction, administrative matters — details of the
firm, marketing policies, commitment to AGN, finances, services provided
and clients services
- and professional matters — independence, employment and staff policies,
local regulatory issues), and one each relating to audit
services, taxation services, consultancy and other, general conclusions
and audit working
paper review guidelines.
In addition,
there are five appendices comprising of the three
most applicable Operating Guidelines relating to
quality matters (Operating Guidelines
18, 19 and 23) which are set out in full as well as two
checklists for the use
of both the firm being reviewed (Implementation checklist) and the
firm undertaking the review (Completion checklist).
The purpose of the modular format is that only the relevant
modules need to be completed dependent upon the scope
of the review as set by the applicable
regional QuAC.
The stated overall
policy for the assurance process is that all AGN member
full firms have to be reviewed at
least every five years; the type of review whether
a full one or a limited one, will be based upon the necessary reviews undertaken
independently of the AGN process in accordance with local professional
requirements.
In
the case of the pre-admission assurance process, a full
review
is undertaken. The scope of the QAM has been
compared
to both the AICPA requirements for
small firm review requirements and also IFAC's international standard
on Quality Control.
The
revised QAM was approved by the Global QuAC for issuance
and
use in the review process with effect from July
1, 2005. The QAM has been made
available
to all regional QuAC's and is available for individual member download
from the members section of our website, in both full format and each module
separately.
The
Global QuAC recognises that all the quality documentation
within
our association must be treated as "living
documentation" i.e., it is
not fixed in concrete but must be updated regularly firstly,
as professional standards
themselves change and secondly, to reflect comments
from review teams on the applicability
and practicality of applying the current requirements.
Therefore, both promulgations being issued by global
professional bodies will be reviewed and also feedback
from review teams will be encouraged.
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