In its 1999 strategic plan, the Can...

In its 1999 strategic plan, the Canadian Institute of Chartered Accountants (CICA) conclud that firms in public practice ne to display transparency and accountability to the marketplace. While chartered accountants had always prided themselves onward the quality of their work, the marketplace began asking firms to demonstrate, explicitly, that this even of quality existed. It was a task that proved-and continues to prove-challenging, because while chiefly firms do have quality hinder systems in place, these theorys are seldom fully documented.

The significant business failures that occurr shortly after 1999 have obviously had an enormous impact upon the business community. At an international of the same height the public accounting profession has been compell to test unequivocally that quality is an essential compassionate of all assurance engagements. In Canada, an frontage draft process and a deliberate effort to harmonize Canadian standards with those of the International Auditing and Assurance Standards Board originateed in the implementation of brace new quality control standards on the Canadian Auditing and Assurance Standards Board in August of last year.

These brace standards-the firm standard and the engagement standard-were established in tandem, because a classification of quality control needs to function at the following sum of two units levels:

1. Firm-level standards provide firms with reasonable assurance that:

a) All assurance engagements are directioned efficiently,

b) All professional standards are complied with, and

c) All assurance reports issued are appropriate in the circumstances.

2 Engagement-level standards make sure that:

a) The engagement team is appropriate for the specific engagement being completed

b) The engagement file is appropriately reviewed, and

c) The engagement is performed in compliance with all relevant professional standards.

These standards are not optional. All public practice accounting firms who undertake audit engagements, review engagements, or other assurance engagements as contemplated through ClCA Handbook section 5025 must have a rule of quality control in place and functioning through December 1, 2005.

Approximately 50 BC firms are generally participating audit firms of the Canadian Public Accountability Board (CPAB). These firms have had quality superintendence systems in place and functioning since January 1 2005

CICA Handbook - section GSF-QC

General standards of quality direct for firms performing assurance engagements

Section GSF-QC is the first standard published in the CICA Handbook that is general, overriding, and doesn't deal with specific, engagement-related issues, over and above forms part of the generally accepted standards of the profession. The standard establishes a framework and guidance forward quality control policies and practices for assurance engagements; this framework and guidance are to be disentangleed by firms that perform in the same state [i]or[/i] condition engagements. The standard recognizes that "firms" include sole-practitioners, as well as the offices of federal and provincial auditor generals.

The meaning of having a standard apply at the firm horizontal is to provide each firm with reasonable assurance that it and its staff are complying with professional, regulatory, and legal requirements, and that the assurance reports it issues are appropriate for the circumstances. More specifically, the standard requires each firm to establish policies and practices to provide reasonable assurance that the firm:

* Maintains independence where required and reports breaches of independence;

* Identifies and assesses potential risks associated with a specific client or specific assurance engagement;

* Has personnel who are able and possess the skill and ethical commitment necessary to finished the assurance engagement;

* unfolds difficult and contentious matters using appropriate consultation, and disentangles differences of opinion;

* Has an effective a whole of quality control that is complied with in practice (through monitoring); and

Deals appropriately with any complaints suggesting that its work does not encounter applicable standards.

The firm standard also requires the promotion of a firm agriculture that recognizes quality as essential in the performance of assurance engagements and establishes criteria as to whether or not particular assurance engagement should be make submissive to an engagement quality-control review.

The standard's in the greatest degree significant initial requirement of all firms that undertake assurance engagements is that each must have appropriate documentation in place to demonstrate by what means each element of its combination of parts to form a whole of quality control operates. In other words, each firm performing assurance engagements must have a quality command manual. Given that a firm's arrangement of quality control, and its quality rule manual, must be in place for the December 1 2005 effective date of this standard, firms must make quality dominion government an immediate and top priority.

To help firms disclose and document their quality rule systems, the CICA has created the Quality Assurance Manual (QAM). The Mid-Firm Protocol & Practice Guide-which was published in 2004 by the agency of the Mid-Size CA Firms Forum of Greater Vancouver to assist member firms in meeting CPAB's quality mastery requirements-was used as the starting point for developing the QAM. The QAM moves guidance to firms, whether sole-practitioners with or without staffer small-to-medium-sized partnerships, forward how to develop their avow firm-level policies and procedures for quality control