Would your accounting practice survive a quality review audit?

Chartered Accountants Australia and New Zealand (CA ANZ) conducts quality review audits (QRA) as part of its Quality and Practice Review Program to maintain expected standards of quality and service of their members in public practice.

In Australia, the requirements for establishing a QMS are set out in ASQM 1 (for assurance and related services engagements) and APES 320 (for all other engagements).

What is a quality review audit?

A QRA assesses compliance by the member firm with APES 110 Code of Ethics for Professional Accountants (including Independence Standards), , professional standards, and legal and regulatory requirements.

Typically, a QRA involves:

• Identification of member firms for QRA
• Assignment of an experienced reviewer to visit the member's practice.
• Examines the practice's quality management systems (QMS), selection and review of a sample engagement files.
• Report to CA ANZ and discuss outcomes with the member firm.

If deficiencies are identified during a QRA, firms may be required to development of an action plan to address deficiencies, subject to follow-up reviews, undertake additional training, and possible disciplinary action.

Top challenges faced by firms in a practice review

Each year, CA ANZ publishes a report, Top issues for practices providing compilation and taxation services in Australia, of their QRA program. The report outlines key findings and key areas of improvement for firms.

Quality review audits conducted by CA ANZ for the year ended 30 June 2024 noted the lack of evidence in relation to a range of requirements. This guide outlines a number of quality management challenges faced by member firms, and the solutions Wolters Kluwer provides to help your firm address these.