Chartered Accountants Australia New Zealand

In Australia, the Australian Securities and Investments Commission (ASIC)—the audit oversight regulator—and three professional accountancy organizations (PAOs) share responsibility for carrying out quality assurance (QA) reviews. ASIC is authorized to review all audits of all entities while the PAOs implement review procedures for their respective members. CA ANZ operates a Quality Review Program which fulfills the SMO 1 requirements. CA ANZ outlines that its QA review program is a risk-based model and that it has tailored the program and review approaches to meet differing sizes, structures, and engagements of practices and avoid duplication with other regulators.

For example, for its reviews of audit practices of major and mid-tier firms—which are also subject to ASIC inspections—CA ANZ will have a reviewer visit the practice and confirm that internal processes are effective by:

• reviewing the practice’s internal review approach, and findings and actions
• reviewing the ASIC inspection report and the practice’s action plan.

The practice is advised of any quality control deficiencies found during the review and any remedial action required. By taking this approach CA ANZ is not duplicating existing file reviews conducted by the regulator.

For other practitioners and practices that are not regularly subject to ASIC’s QA review procedures, CA ANZ will have a reviewer visit the practice, conduct on-site reviews, and submit a results letter outlining any deficiencies and remedial action required. Finally, CA ANZ is planning to pilot an online review of non-assurance engagements for sole practitioners conducting a micro practice where the practitioner could complete an online questionnaire in order to self-assess quality control practices.

CA ANZ’s Quality Review Manager is charged with ensuring that quality reviewers are trained and competent to carry out reviews. CA ANZ reviewers are accredited after a mandatory training program. CA ANZ provides a variety of guidance on QA reviews in order to support its members’ preparation, improvement, and maintenance of professional standards. All review documentation, including questionnaires, are available for members on the CA ANZ website. Additionally, CA ANZ publishes an annual report that summarizes the results of the QA reviews which is shared with members via its online library and during training seminars.

CA ANZ indicates that the strategic direction, content, and policies of the QA review program are monitored by its Quality Review Committee. The committee is tasked with reviewing the QA review system every three years and benchmarking it against SMO 1 and other QA review programs in the jurisdiction.

Finally, CA ANZ engages in other collaborative efforts with regulators in relation to QA and quality control. It matches members with ASIC’s registers of Registered Company Auditors (RCAs) and Self-Managed Superannuation Auditors (SMSF auditors). In this way, CA ANZ is able to ascertain whether its members with these qualifications are fulfilling their professional obligations under ASIC’s regulations. CA ANZ also monitors and reports to the Financial Reporting Council—a statutory body responsible for providing strategic advice on audit quality—on firms’ quality control policies and procedures.

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. CA ANZ’s Chartered Accountant (CA) and (FCA) designations are recognized as accounting qualifications for these titles.

Individuals who wish to earn the CA designation must hold an accountancy degree from an accredited university and complete CA ANZ’s CA Program, which is the only professional accountancy program that meets the educational quality of the Australian Higher Education standards and is accredited by the Tertiary Education Quality and Standards Agency (TEQSA). The CA Program comprises five modules including four technical modules and a final Capstone module, 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 particular skills.

Finally, all CA ANZ members must adhere to CPD obligations as outlined in CA ANZ Regulation 7. CA ANZ conducts an annual random audit for a 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 its’ members continuing education.

In 2015, CA ANZ released revised Professional Accreditation Guidelines for accounting degree programs in Australia and New Zealand to align with updated IES 2 and IES 3 technical competence and professional skill requirements. The institute conducts annual and five-yearly review cycle of accredited Australian and New Zealand accounting degrees to ensure appropriate coverage of required competency areas. Additionally, each of its CA Program modules is annually reviewed and updated for developments in learning and accounting by the Academic Module Chair and Member Advisory Panel. CA ANZ states it has adopted adaptive learning modules and simulations and continually amends learning and assessment activities to reflect topical issues.

Current Status: Sustain

In Australia, the applicable auditing standards are issued by the Auditing and Assurance Standards Board (AUASB), an independent, statutory agency of the Australian Government. Since April 2006, the AUASB has released Australian Auditing Standards (AAS) based on the ISA as issued by the IAASB, meaning that the 2016 ISA—which include the new auditor’s report—are in effect.

CA ANZ is committed to supporting the ongoing adoption and implementation process of AAS that align with ISA. In this regard, CA ANZ reports that it is involved in consultations on any issues arising and that it provides input into AUASB’s issuance of standards and guidance statements. Additionally, CA ANZ notes that it regularly liaises with the Australian member of the IAASB to provide feedback on standard developments.

To support its members with implementation, CA ANZ provides online 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 newsletters, technical articles, and tools for new auditor reporting and professional skepticism. Furthermore, CA ANZ states that it has an integrated continuing professional development program for audit practitioners that includes online and in-house training and it affirms that its training is regularly enhanced to include material and content on new standards.

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 professional accountants working in Australia must comply. The APESB has issued the Accounting Professional & Ethical Standard (APES) 110 Code of Ethics for Professional Accountants, which is based on the IESBA Code of Ethics and was last updated in September 2017 to incorporate the 2016 IESBA Code of Ethics, emphasizing the changes due to NOCLAR.

CA ANZ employs several awareness and training initiatives to support its members in understanding and applying the ethical requirements. This includes online and in-person trainings on ethics and governance; access to resources and tools, including an info-sheet on NOCLAR; 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 manage ethical concerns or dilemmas in the workplace. CA ANZ also offers a Chartered Accountants Advisory Group for more specialized support. CA ANZ will monitor questions raised during these calls.

CA ANZ reports that it is active in supporting the APSEB’s adoption process by responding to consultations and proposed changes with other professional accountancy organizations in the jurisdiction and the ABSEB as well as by submitting comments to exposure drafts issued by the APESB and the IESBA. CA ANZ, in collaboration with CPA Australia, nominated an IESBA member and technical advisor and will liaise with these representatives to monitor developments to the IESBA Code of Ethics.

Current Status: Sustain

Financial reporting for public sector entities in Australia is based on the Australian Accounting Standards (AAS) adopted by the Australian Accounting Standards Board (AASB)—an independent Australia government agency. The Australian Accounting Standards incorporate and comply with IFRS and include a specific standard for public sector accounting. The AASB’s transaction neutrality policy means similar transactions and events are accounted for in a similar manner by all entities. The professional accountancy organizations in the jurisdiction report AASB is currently consulting on a proposed revised policy. It sets out the conditions necessary for the AASB to recommend moving from IFRS to IPSAS as the basis for not-for-profit public sector accounting in Australia.

In this regard, CA ANZ reports that it supports the AASB’s activities in aligning the AAS with the IPSAS where appropriate. CA ANZ provides input to AASB and IPSASB-issued exposure drafts and notes it also supports the IPSASB board member nominated by CPA Australia and CA ANZ.

Furthermore, CA ANZ has created a new role dedicated to supporting members in the public sector with application of the standards. CA ANZ also issues biweekly newsletters, provides tools and resources in its online library, and shares articles highlighting opportunities for chartered accountants within the public sector.

Current Status: Sustain

Investigative and disciplinary (I&D) procedures for professional accountants in Australia are carried out by the Australian Securities and Investments Commission (ASIC) and three professional accountancy organizations (PAOs) in the jurisdiction. ASIC is charged with carrying out these procedures for registered company auditors while the PAOs implement I&D systems for their respective members.

CA ANZ has established 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 Tribunal. When a complaint is not referred to the Disciplinary Tribunal, the member and complainant may seek a review by the Reviewer. The Reviewer is an independent lawyer who can assess the decision and process of the PCC based on available information and can make recommendations or tell the PCC to reconsider its decision.

More detailed information CA ANZ’s I&D procedures can be found here and CA ANZ outlines that they meet the SMO 6 requirements. CA ANZ reports that reviews of its system are done regularly by an independent Professional Conduct Oversight Committee that it established in 2014.

CA ANZ provides the public with access to a complaint form as well as informational sheets for those filing a complaint and for its members so that they may know what to expect when handling a complaint.

Following an external review, new by-laws were introduced on 28 July 2016. These new by-laws implemented a number of changes to the complaint and disciplinary process to improve:

• the experience of members who have a complaint made against them;
• the governance of CA ANZ’s disciplinary framework; and
• the alignment between the Australian and NZICA’s disciplinary framework.

As a result of the implementation of the new By-laws, CA ANZ’s Member Conduct & Discipline procedures are aligned with the SMO 6 requirements to the extent permitted by local laws.

Current Status: Sustain

The Australian Accounting Standards Board, an independent Australian Government agency, sets the corporate accounting standards for the jurisdiction. There are two tiers of reporting requirements for preparing general purpose financial statements with Tier 1—known as the Australian Accounting Standards—incorporates the IFRS while Tier 2 is based on the IFRS for Small- and Medium-sized Entities.

CA ANZ reports that the AASB is a statutory body authorized to set corporate accounting standards and therefore, the CA ANZ’s role is to support the implementation of applicable standards by its members.

CA ANZ assists its members with resources, such as tools and templates, related to financial reporting in addition to offering in-person and online continuing professional development training that covers financial reporting topics and detailed coverage of the latest standards. CA ANZ also shares information electronically on standard updates through its e-newsletter, Acuity magazine, technical articles, and email communications to further raise awareness. CA ANZ also actively advocates for and encourages the practice of integrated reporting.

In regard to supporting standard-setting processes, CA ANZ notes that it regularly responds to IASB exposure drafts and discussion papers and will seek its members’ input prior to submission.

Current Status: Sustain