Chartered Accountants Australia New Zealand (Formerly recognized as ICAA)

In Australia, the Australian Securities and Investments Commission (ASIC), is the regulator responsible for oversight of registered company auditors and it has a co- regulatory role with the Australian Tax Office (ATO) with respect to oversight of self- managed superannuation fund auditors. ASIC has responsibility for the surveillance, investigation and enforcement of the financial reporting and auditing requirements of the Corporations Act 2001 (Cth) and conducts regular inspections and surveillance. ASIC is authorized, but not obliged, by the legislation to review all audits of all entities.

The three professional accountancy organizations (PAOs) in Australia also have a role in relation to monitoring their respective members and their practices.

CA ANZ operates a Quality Review Program which fulfills the requirements of SMO 1. The CA ANZ Quality Review Program is both a risk-based and cyclical (mixed approach) model which is tailored to apply review approaches to meet differing practice sizes, structures, and engagements of practices and to avoid duplicating ASIC’s program and duplication with other regulators and PAOs.

For example, for Quality Reviews of audit practices of major and mid-tier firms—which are also subject to ASIC audit inspection—CA ANZ will have its engaged reviewer (CA ANZ Reviewer) visit the practice to assess the practice’s system of quality management, including risk management, and confirm that the system of quality management is in place and effective:

• by reviewing the reports and monitoring activities and oversight by regulators to assess the practice’s compliance with both documented quality management policies and procedures and professional standards and regulatory requirements;
• by reviewing the outcomes of those activities, including action plans and remediation programs; and
• through discussions with leaders, including, but not limited to, head of quality and risk and other individuals as required.

CA ANZ is currently engaged in a review of the scope of the Quality Review program for very large practices and expects to have the review completed by 2024.

The practice is advised of any quality management deficiencies found during the review and any remedial action required. Reliance is placed on inspections by ASIC and practice network review programs. By taking this approach CA ANZ is not duplicating existing file reviews conducted by other regulators and inspectorates.

ASIC recently announced a restructuring of its audit surveillance function and teams. CA ANZ has engaged with ASIC and seeks to understand the scope of ASIC’s audit inspection program and implications for the CA ANZ Quality Review Program.

For other practitioners and practices that are not regularly subject to ASIC’s audit surveillance procedures, CA ANZ will have a CA ANZ Reviewer visit the practice, conduct on-site or remote reviews, and submit a results letter outlining any deficiencies and remedial action required. In addition, CA ANZ operates a review of sole practitioners conducting a micro practice, where the practitioner completes the required questionnaires (including a file review) to self-assess the system of quality management in place at the practice. This type of review was introduced in 2021.

Irrespective of the review type, all deficiencies identified during reviews are documented and subject to remediation requirements. Failure to remediate deficiencies results in a referral of the member to Professional Conduct for disciplinary action.

CA ANZ’s Quality Review Manager is charged with ensuring that CA ANZ Reviewers are trained and competent to carry out reviews. CA ANZ Reviewers are accredited after a mandatory training program. Quarterly webinars are held with all CA ANZ Reviewers to provide updates to the program and professional standards. CA ANZ provides a variety of guidance on Quality Reviews to support its members’ preparation for reviews, quality improvement, and maintenance of professional standards; this includes a quarterly webinar on overview of Quality Review.

All review template documentation, including questionnaires, is available for members on the CA ANZ website. Additionally, CA ANZ publishes an annual report that summarizes the results of the Quality Reviews and the top ten deficiencies identified during reviews. Deidentified details are shared with members via CA ANZ’s online library and during training seminars:

• to use as a benchmarking tool; and
• providing tools and resources to remediate the deficiencies identified.

CA ANZ engages in a range of collaborative efforts with regulators in relation to Quality Reviews and quality management. It matches members with ASIC’s registers of Registered Company Auditors (RCAs) and Self-Managed Superannuation Auditors (SMSF auditors). In this way, CA ANZ can ascertain whether its members with these qualifications are fulfilling their professional obligations under ASIC’s regulations. CA ANZ reports to the Financial Reporting Council—a statutory body responsible for providing strategic advice on audit quality and on firms’ systems of quality management. The report includes the overview of audit quality initiatives undertaken by CA ANZ and the number of audit firm reviews undertaken by CA ANZ and outcomes of those reviews.

Current Status: Sustain

Educational requirements for the two protected professional accountancy titles in Australia—registered company auditor (RCA) and qualified accountant—are governed by the Corporations Act 2001 and the Australian Securities and Investment Commission (ASIC) Act 2001. ASIC and three professional accountancy organizations (PAOs) in the jurisdiction also have a role in setting and implementing initial and continuing professional development requirements (IPD and CPD, respectively). According to the Corporations Act 2001 and ASIC’s Regulatory Guide 154, one of the entry requirements for becoming an RCA or a qualified accountant, respectively, includes holding a recognized tertiary accounting qualification from one of the PAOs. Membership of CA ANZ and completion of the Chartered Accountant (CA) Program fulfil these requirements.

Individuals who wish to earn the CA designation must complete CA ANZ’s CA Program which is made up of the Graduate Diploma of Chartered Accounting (GradDipCA) and Mentored Practical Experience. The CA Program is the only Australian professional accountancy program that is accredited by the Australian Tertiary Education Quality and Standards Agency (TEQSA) and that meets the Australian Higher Education standards. The CA Program comprises nine subjects (seven core and two electives) and incorporates both online and face-to-face learning. As part of the CA Program, candidates must also complete three years’ practical experience with an Approved Training Employer (ATE). CA ANZ has developed a Practical Experience Logbook that outlines competencies, both technical and non-technical, that all candidates must be able to demonstrate upon completion of their work experience. A final mentor report must be submitted with the membership application that confirms individuals have obtained these skills.

Finally, all CA ANZ members must adhere to CPD obligations as outlined in CA ANZ Regulation 7. Members are required to confirm their compliance with CPD obligations as part of the annual membership renewal process. To verify confirmations, CA ANZ conducts annual monitoring of a random sample of its membership to ensure that members are meeting these requirements. In addition, the CPD records for members holding a Certificate of Public Practice are reviewed during their quality review. CA ANZ develops and implements an annual events and CPD calendar that offers a range of training activities on key topics such as audit and assurance, financial reporting, tax, ethics and integrity, and leadership. Courses are offered online and in-person to support members' continuing education. In 2021, CA ANZ released revised Professional Accreditation Guidelines for accounting degree programs in Australia to align with updated IES 2 and IES 3 technical competence and professional skill requirements. CA ANZ conducts an annual and five- yearly review cycle of accredited Australian accounting degrees to ensure appropriate coverage of required competency areas.

Current Status: Sustain

The auditing and assurance standards are issued by the Auditing and Assurance Standards Board (AUASB), an independent Australian Government agency. Since April 2006, the AUASB has adopted the ISAs, as issued by the IAASB, to develop Australian Auditing Standards (ASA).

CA ANZ is committed to supporting the ongoing adoption and implementation process of ASA that align with ISA. In this regard, CA ANZ participates in and contributes to the development of a single set of auditing standards for world-wide use and provides input into consultations conducted by the AUASB and the IAASB. Additionally, CA ANZ regularly liaises with the Australian member of the IAASB to monitor developments.

To support members with implementation, CA ANZ provides resources dedicated to audit and assurance topics to help members stay up to date on current audit and assurance trends, developments and regulatory requirements. These resources include a technical newsletter, tools and resources, and research and insights on a range of topics, including audit quality and risk. Furthermore, CA ANZ has an integrated continuing professional development program for assurance practitioners including online and face-to-face training, and offerings are regularly enhanced to include content on new and emerging areas, such as sustainability assurance.

Current Status: Sustain

The Accounting Professional & Ethical Standards Board (APESB), an independent body that was established in 2006, sets the ethical requirements with which all members of the professional accounting bodies in Australia must comply. The APESB issues the Accounting Professional & Ethical Standard (APES) 110 Code of Ethics for Professional Accountants (including Independence Standards), which is largely based (under license) on the IESBA Code of Ethics. APES 110 was updated in December 2022 to incorporate recent changes to the IESBA Code including Role and Mindset, Fees, and Non-Assurance Services (NAS). In 2023, the APESB issued a compiled Code for Public Interest Entities (PIEs) and technology provisions.

CA ANZ deploys several awareness and training initiatives to support its members in understanding and applying ethical standards and pronouncements. This includes online and face-to-face training, micro courses on ethics and professional standards; access to resources and tools, disseminating newsletters and technical articles; and updating its CA Program accordingly. In addition, CA ANZ offers two support services to members who are facing professional and ethical challenges. CA ANZ’s Professional Standards team operates a telephone service to talk through issues and queries and offer practical advice to help address ethical concerns or dilemmas in the workplace. CA ANZ also offers the Chartered Accountants Advisory Group (CAAG) for more specialized support. CA ANZ monitors questions raised during these calls with common themes informing future training and development.

CA ANZ is an active contributor to the standard setting process both domestically through the APESB and internationally via the IESBA. CA ANZ supports the APESB’s adoption of international standards by responding to consultations and exposure drafts either independently or jointly with other professional accountancy organizations in the jurisdiction. CA ANZ in collaboration with CPA Australia, has previously nominated an IESBA member. The CEO of the APESB is currently a member of the IESBA and is supported by the General Manager Professional Standards from CA ANZ. CA ANZ regularly liaises with the APESB and the IESBA to monitor developments with IESBA and the IESBA Code.

Current Status: Sustain

The accounting standards are issued by the Australian Accounting Standards Board (AASB), an independent Australian Government agency. The AASB uses International Financial Reporting Standards (IFRS Standards) set by the International Accounting Standards Board (IASB) as a basis for Australian Accounting Standards (AAS) covering the for-profit sector and the not-for-profit (NFP) sector, which includes the public sector.

The AASB’s Not-for-Profit Entity Standard-Setting Framework sets out how the AASB uses IFRS Standards for developing, issuing and maintaining AAS for the NFP sector, which includes the public sector, and when modifications are required. NFP-specific standards, interpretations or guidance might be developed based on International Public Sector Accounting Standards (IPSAS Standards) issued by the International Public Sector Accounting Standards Board (IPSASB). The AASB’s transaction neutrality policy means similar transactions and events are accounted for in a similar manner by all entities.

The AASB’s Approach to International Public Sector Accounting Standards sets out the conditions necessary for the AASB to recommend moving from IFRS Standards to IPSAS Standards as the basis for public sector accounting in Australia. In this regard, CA ANZ supports the AASB’s activities in aligning the AAS with the IPSAS where appropriate. CA ANZ provides input into consultations issued by the AASB and the IPSASB and also regularly liaises with the Australasian member of the IPSASB to monitor developments.

Current Status: Sustain

Investigative and disciplinary (I&D) procedures for professional accountants in Australia are predominantly carried out by the Australian Securities and Investments Commission (ASIC), the Company Auditors Disciplinary Board (CADB), the Tax Practitioners Board (TPB) and three professional accountancy organizations (PAOs) in the jurisdiction. ASIC is responsible for the registration and oversight of registered company auditors and for referring RCAs to the CADB for I&D. The TPB is responsible for carrying out those procedures for registered tax practitioners. The PAOs implement I&D systems for their respective members.

CA ANZ has a Professional Conduct Committee (PCC) to receive and investigate complaints and subsequently determine if they should be referred to the Disciplinary Tribunal. Both the PCC (by consent) and Disciplinary Tribunal may issue sanctions. Disciplinary Tribunal hearings and decisions are public and may be appealed to the Appeals Councill. Decisions of the PCC, excluding those to refer a complaint to the Disciplinary Tribunal, may be reviewed: the member and complainant may request a review by the Reviewer of Complaints. The Reviewer of Complaints is an independent lawyer who can assess the decision and process of the PCC based on available information and can make recommendations or require the PCC to reconsider its decision. The PCC is required to consider the Reviewer’s findings but is not compelled to change its decision.

CA ANZ provides the public with access to a complaint form as well as information guides for those filing a complaint and for its members so that they may know what to expect when a complaint is made. More detailed information on CA ANZ’s I&D procedures can be found here.

CA ANZ has recently carried out a comprehensive review of its I&D framework and procedures, which included a benchmarking exercise against other PAOs and professional associations, and which found that CA ANZ’s I&D framework meets or exceeds the SMO6 requirements and relevant benchmarks. The review also identified several opportunities to enhance the I&D framework and made several recommendations to do so. In summary, the enhancements relate to extending the I&D framework to former members, increasing the maximum fines that may apply collectively to members who are partners of firms that experience certain adverse firm events and procedural and efficiency enhancements. As part of this, CA ANZ members voted on and approved a suite of amendments to CA ANZ By-Laws in October 2023. The amended By-Laws become effective following assent of the Governor General on 25 January 2024. Regular reviews of the I&D system are also undertaken by an independent Professional Conduct Oversight Committee.

Current Status: Sustain

The accounting standards are issued by the Australian Accounting Standards Board (AASB), an independent Australian Government agency. Since July 2004, the AASB has adopted the International Financial Reporting Standards (IFRS Accounting Standards), as issued by the International Accounting Standards Board (IASB), to develop equivalent Australian Accounting Standards (AAS). There are two tiers of reporting requirements for preparing general purpose financial statements; with Tier 1 being for entities with public accountability, while for all others Tier 2 has reduced disclosure requirements.

CA ANZ is committed to supporting the ongoing adoption and implementation process of AAS that aligns with IFRS. In this regard, CA ANZ provides input into consultations issued by the AASB and the IASB and regularly liaises with the IASB member from Australia to monitor developments.

To support its members with implementation, CA ANZ provides resources dedicated to financial reporting topics to help members stay up to date on current reporting trends, developments and regulatory requirements. These resources include a technical newsletter, tools and resources, and research and insights on a range of topics, including NFP reporting and digital reporting. Furthermore, CA ANZ has an integrated including online and face-to-face training, and offerings are regularly enhanced to include material and content on new and emerging areas, such as micro-courses on sustainability reporting.

Current Status: Sustain