ISA 2 sơ đồ và cấu trúc nghề nghiệp

Regulation of Auditing: The Financial Reporting Council • Financial Reporting Council FRC – a statutory body established in 1999 with the responsibility of providing a broad oversight of

Chapter 2 The Structure of the

Profession

Learning Objective 1:

Professional Status of the Auditor

• Professional occupations can be distinguished by five

common attributes These are:

Auditing as a profession

• Auditing can be classified as a profession because of its:

– reliance on an underlying theory of accounting and

auditing;

– expertise;

– ability to control admissions to the profession;

– regulatory mechanisms employed; and

– conservative behavioural subculture

Regulation of Auditing: The Financial

Reporting Council

• Financial Reporting Council (FRC) – a statutory body

established in 1999 with the responsibility of providing a

broad oversight of the accounting standard-setting process This role was recently expanded to include a broad oversight

of auditing standard-setting and the monitoring of auditor

independence

Learning Objective 2:

Regulation of Auditing:

The Auditing and Assurance Standards Board

• The Auditing and Assurance Standards Board (AUASB) was reconstituted as an independent statutory body on 1 July

2004 and is responsible for the development of auditing and assurance services standards

– The Board originally consisted of 10 members (12 in

2006) appointed by FRC, and a Chair appointed by the Treasurer

– Responsibility for the final approval of auditing and

assurance standards now lies with Parliament

– The AUASB has a long-standing policy of convergence and harmonisation with International Standards on

Auditing (ISAs)

Regulation of Auditing: The Accounting Professional and Ethical Standards Board

• Until 2006 CPA Australia and the Institute of Chartered

Accountants in Australia maintained control of the setting of ethical standards, which were promulgated through a joint Code of Professional Conduct (CPC)

• In 2006, a body independent of the professional accounting bodies, the Accounting Professional and Ethical Standards Board (APESB) was formed

• The APESB establishes ethical standards, as well as

professional standards by which the members of the

professional accounting bodies will be required to abide

• THE APESB will consist of 8 members, including 2 from CPA Australia and 2 from ICAA

Regulation of Auditing (Cont.)

• Two other government agencies are also involved in the

regulation of auditors:

– Australian Securities and Investments Commission

(ASIC) — the administering authority for the Corporations

Act 2001.

– Companies Auditors and Liquidators Disciplinary Board (CALDB)— determines whether a registered auditor or liquidator has failed to carry out their duties properly or is not a fit and proper person to be registered

Registered company auditor

• In order to be appointed as a company auditor under s 1280

of the Corporations Act 2001, a person must ordinarily:

– have sufficient auditing experience; and

– be a fit and proper person.

Learning Objective 3:

Regulation of Subject Matter Audits

• Financial Reporting Council (FRC) — responsible for

oversight of accounting standard-setting process

• Australian Accounting Standards Board (AASB) —

responsible for the development of accounting standards in Australia

• Urgent Issues Group (UIG) — provides authoritative

guidance on accounting issues that are otherwise likely to receive divergent or unacceptable treatment

• Financial Reporting Panel (FRP) — established in 2004 to provide a forum for review of disputes between ASIC and entities lodging reports with ASIC

Learning Objective 4:

Internationalisation of Auditing

• Increased international trade has contributed to the

development of international auditing practices

• Multinational organisations wish to ensure the quality of

financial information from subsidiaries and related entities

• The International Organisation of Securities Commissions (IOSCO) (including SEC in USA and ASIC in Australia)

supports the harmonisation of international auditing

standards

• Most countries consider International Standards on Auditing (ISAs) carefully when developing their own standards

Internationalisation of Auditing (Cont.)

• Key groups include:

– International Federation of Accountants (IFAC) — guide efforts

to develop technical (accounting and auditing) and ethical

standards Members include 163 accounting bodies (including ICAA and CPA Australia) in 119 countries.

– International Auditing and Assurance Standards Board (IAASB)

— independent body supported by IFAC that develops standards and guidance for audit and assurance services.

– Transnational Auditors Committee (TAC) — executive arm of the auditing firms which perform auditing across national

boundaries.

– International Forum on Accountancy Development (IFAD) —

created in 1999 by IFAC and World Bank Consists of a range of public and private organisations aiming to improve financial

reporting, accountability and transparency worldwide.

Learning Objective 5:

Profile of the Auditing Profession

• Currently, there are two key accounting organisations in

Australia:

– CPA Australia; and

– The Institute of Chartered Accountants in Australia

(ICAA)

• Membership of either of these two bodies by public

accounting practitioners is voluntary

• However membership of either of these bodies (or another prescribed body) is necessary in order to become a

registered company auditor

Membership of the ICAA or CPA Australia

• To become a full member of either organisation, a person must have:

– completed a recognised degree from a university;

– completed the relevant educational entry programme (CA

or CPA program) of the professional body;

– have appropriate employment experience; and

– be considered a fit and proper person

CPA Australia ICAA

Profile of the audit profession and

audit firms

• The audit profession in Australia has two levels:

(i) national and international (including the Big Four (since the demise of Arthur Andersen) and second tier firms); and

(ii) regional or local firms.

• The largest international firms are known as the Big Four They are:

– Deloitte

– Ernst & Young

– KPMG Australia

– PricewaterhouseCoopers

• The Big Four dominate the practice of public accountancy

• They audit approximately two-thirds of listed companies in Australia

Size of big four audit firms

Profile of the audit firms and other

services

• While audit and assurance services forms a substantial part

of a public accounting firm’s client base and revenue stream, most firms also offer:

Learning Objective 6:

Internal Structure of an Audit Firm

• Currently, audit firms generally practice as a partnership

• As a result of CLERP 9 amendments, audit firms can now apply to be an authorised audit company

• Provides advantages of limitations in liability and adequate professional indemnity Insurance must be maintained

• Most large audit practices are usually structured along

industry specialisations

Positions and duties in an audit firm

Quality control procedures

• Key quality control procedures employed by the professional bodies are:

– Practice reviews and rotation of auditors:

 internal review (Engagement quality control review) — auditor subject to review by another partner in the practice;

 periodical rotation of auditors (partners and staff) to limit length of time spent on one client;

 peer reviews — independent periodic review by another firm

of public accountants; and

 continuing professional education requirements.

Learning Objective 8:

Auditing in the Public Sector

• Another important auditing sector, separate to the private

auditing sector, is the public auditing sector

• Many public sector entities require auditing

• Responsibility for public sector audits rest with the

Commonwealth and State Auditor-Generals

• They use AUSs/ASAs as the basis of their auditing