ACCA – Wolters Kluwer Joint Event: A Practical Guide to the Quality Management Standards SSQM 2 & SSA 220

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Description

With effect from 1 July 2023, ACRA's inspection powers were expanded to include quality control review on accounting entities, so that audit firms will deliver consistent high audit quality.

The quality standards provide the fundamental framework for embedding quality into every audit and reducing audit failures, helping to identify where professional standards may not have been followed or an inappropriate audit report may have been issued. These standards firmly place the responsibility for audit quality at the firm level rather than the level of an individual audit partner and have been designed to be flexible and scalable whist permeating every part of every audit.

A focus on quality throughout the audit firm should lead to better audits and more accountability.

SSQM 2, Engagement Quality Reviews

An engagement quality review (EQR) is an integral part of the audit process for many audits. An EQR is defined as an ‘objective evaluation of significant judgements made by the engagement team and the conclusions reached thereon, performed by the engagement quality reviewer (the reviewer) and completed on or before the date of the engagement report'.

SSQM 2 aims to ensure the right person is appointed to perform the review and clarifies the responsibilities associated with the role. It seeks to emphasize the importance of, and to improve the effectiveness of, EQRs.

SSA 220 (Revised), Quality Management for an Audit of Financial Statements

SSA220 (Revised) concerns the specific quality considerations for an audit of financial statements and therefore has a more limited scope that SSQM 1 and SSQM 2 which are firm wide.

The engagement team, led by the audit engagement partner is responsible for the compliance with the standard as part of the firms SoQM. Specifically, they are responsible for:

• Implementing the firm’s policies and procedures in response to quality risks applicable to the audit
• Determining whether to devise and implement additional policies and procedures beyond those of the firm
• Communicating to the firm any information from the audit that is required to be communicated by firm policies – e.g., independence confirmations from the team, timesheets for the audit team, raising of contentious issues with an EQR in a timely manner etc.

Programme Outline

This practical workshop will focus on the contents of the revised quality management standards that were issued in July 2021 and had taken effect for audits of financial statements for periods beginning on or after 15 December 2022.

Under SSQM 2, we will cover:

• Engagements subject to engagement quality reviews
• Appointment of the engagement quality reviewer
• Eligibility of the Engagement Quality Reviewer
• Impairment of the Engagement Quality Reviewer’s eligibility
• The responsibility of the Engagement Partners
• Performance of the Engagement Quality Review
• Differences in opinion
• Documentation of the engagement quality review

Under SSA 220 (Revised), we will cover:

• Interaction with the firm’s System of Quality Management
• New definition of Engagement Team
• Leadership Responsibilities
• Ethics and Independence
• Acceptance and Continuance of Client Relationships
• Engagement Resources
• Insufficient Engagement Resources
• Engagement Performance
• What need to be reviewed
• Consultation

This workshop qualifies for 7.0 CPE hours in Auditing Standards, Pronouncements and Methodology (Category 3).

What you will learn

On completion of this workshop, participants should be able to include the following areas into the firm’s System of Quality Management Manual:

• Importance of the EQR
• Scope of engagement quality reviews
• Appointment and eligibility of engagement quality reviewers
• Responsibilities of the engagement quality reviewer
• Documentation
• The Role and Responsibility of An Engagement Team
• Engagement resources
• Engagement Performance

In addition, participants should be able to:

• Encourage proactive management of quality at the engagement level.
• Keep the standard fit for purpose in a wide range of circumstances and in a complex environment.
• Emphasize the importance of professional skepticism and enhance the documentation of the auditor’s judgments.

Target Audience

This workshop is essential for those who are involved in quality management and monitoring approaches in audit firms.

Expert Speaker

Luar Eng Hwa

Mr Luar has more than 40 years of working experience in areas concerning audit and assurances, fraud examination and investigation, accounting, corporate secretarial and advisory as well as tax compliance and advisory services for international and local businesses. As a business consultant, he renders advisory to corporations and assists them in their preparation for IPO, and is active in corporate restructuring, investment decisions, due diligence and perform feasibility studies for companies resulting from his client's business expansion.

Mr Luar started his professional career since 1983 and thereafter with several medium-sized local accounting practices, handling a mixed portfolio of clients on advisory services, assurance services and tax advisory & compliance. He is the Founder of E H Luar & Co, an accounting firm established in 1999 that delivers a full range of professional services tailored to the needs of both private sector business and public interest entities.

Mr Luar has acted as an Audit Committee Chairman and Advisor to a Large Charity, Independent Director of several privately-owned fund-investments companies listed in overseas stock exchange. He is a Public Accountant and a Fellow Chartered Accountants of Singapore, a Fellow Chartered Certified Accountants in UK, and a Fellow CPA (Australia). He holds a practising certificate as a Certified Fraud Examiner since March 2000, and an Accredited Tax Advisor (Income Tax & GST). He is also a member in the Singapore Institute of Arbitrators and the Singapore Institute of Directors.