Reviews the one reason why your firm is likely to fail a public practice quality review/audit.

1. Attention all Public Accountants ...
The One Reason Why You
Will Fail a Quality
Assurance Peer review 1
...and what you can do to prevent it
1. Also called a quality control audit Brought to you by

2. Failure to implement a
comprehensive quality assurance
system, that complies with
APES 320
You don’t want this to happen to your firm:
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3. What would / could happen if your
professional body failed you on
quality control?
Potentially -
• The firm could lose it's professional membership;
• There will be costs, fines, involved in trying to fight it;
• Lost prestige from not having that professional connection;
• Lost credibility amongst current and prospective clients;
• Possibly, losing clients (and hence income) as a final outcome;
• Loss of reputation amongst wider business community.
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4. So, what can you
do about it?
(assuming you already don't have a compliant
quality control system in place)
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5. Before that gets answered, it's
important to understand the reason(s)
behind quality assurance in accounting
firms, and what's involved (or required)
in such a system.
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6. Why Do We Have Quality Control?
Essentially, its concerned with ensuring the work done by
practitioners (and their employees) complies with
professional standards and regulatory requirements.
It’s not concerned with the appropriateness (or otherwise) of
opinions or advice provided to your clients.
It’s the over-arching system of getting the client work done.
Ultimately, the aim is to lower business risk (hence enjoy
better insurance outcomes), and raise the opinion that
government and other regulators have of the profession.
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7. What does Quality Control Involve? (1)
• Quality control in accounting
firms is regulated by the
standard APES 320 – Quality
Control for Firms.
• In certain instances this has
legislative backing.
• This standard describes the 6
main areas of activity in the
firm that need to be covered.
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8. What does Quality Control Involve?
(2)
1. Leadership 1. Aspects of the team and
responsibilities for human resource issues.
quality.
2. Performing the (various)
2. Adherence to the client engagements, in
relevant ethical accordance with
requirements. professional
requirements.
3. Accepting and continuing
client relationships and 3. Monitoring and improving
specific engagements. the firms systems, etc,
handling system failures
and exceptions.
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9. What to about Quality Control?
There are 4 possible options, each with pro’s
and con’s.
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10. Option 1:
Do nothing.
For: Against:
• Won’t waste any time. • Initial fail of quality
review.
• Will be required to
complete one anyway.
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11. Option 2:
Take the document provided by the
professional body and adopt it as your own.
For: Against:
• Won’t waste any time, • Likely will fail quality
quick and easy. review: why? As it is
• This document is seen as someone else’s
already designed to be and you are taken not
compliant. to know/understand
the requirements of
quality control.
• Will be required to
complete one anyway.
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12. Option 3:
Take the document provided by the professional
body and fully adapt it to your practice.
For: Against:
• Will likely get through • This will consume a huge
quality review first time. amount of professional
time:
– In understanding the
requirements of the
standard;
– And how these relate to the
document, and what needs
to be customised.
• Expect to take 6-8 weeks.
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13. Option 4:
Completely Outsource Option 3.
For: Against:
• Will get through • Needs a few hours of
quality review first your time to answer
time (see guarantee). critical questions.
(but this is really a plus compared
to option 3).
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14. How can you easily side-step a
follow-up quality review?
Easy. Initiate a quality control process now, including a
customised manual.
Even if you’re a few years away from your
next review …
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15. Reviewers not only want to see
that you have a document in
place
They also want to see that you
understand the concept of
quality control.
Most importantly, they want to
see that you are using it
- and will look for evidence of this.
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16. Insignia Consulting supplies Quality Control
Manuals fully customised to your practice.
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17. Contact Michael at Insignia Consulting
if you would like more information about
investing in a custom quality control manual.
quality@insigniaconsulting.com.au
www.qualitycontrol.insigniaconsulting.com.au
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