Hon. Gerard B. Sanvictores Member, Board of Accountancy

July 16, 2015

QUICK RECIPE ON PREPARING

QUALITY ASSURANCE REVIEW

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

OBJECTIVES

► Recognize what Quality Assurance Review (QAR) is all about ► Recognize the importance of QAR

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

AGENDA

► QAR - the Why and How - A brief backgrounder - Definition - Basis - Parties in implementation - The Program ► Preparing for QAR - During transition - before effectivity - After effectivity - if selected

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

The QAR ► A brief backgrounder

- What happened in 2010 - Developments

► Definition - Simply, a review of the quality control system of CPA practitioners.

- As defined by the BOA: A study, appraisal or review: by an independent reviewer/inspector of the quality of audit of FS and the adoption of best practices through a review of the quality control measures instituted by

CPA Practitioners to ascertain compliance with prescribed professional, ethical

and technical standards.

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

WHAT IS THE BASIS FOR QAR REQUIREMENT

► Legal - RA 9298, The Philippine Accountancy Act of 2004

- BOA Revised Rules and Regulations for the BOA Conduct of Oversight into the Quality of Audits of FS and Operations of CPA Practitioners. [to be issued?]

► PICPA Membership in IFAC

- IFAC SMO 1, Quality Assurance

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

WHO ARE THE PARTIES IN IMPLEMENTATION ► BOA

- Mandated under RA 9298 to implement the QAR

► Council for Accreditation and Quality Control of Practicing CPAs - Created under a MOA dated August 12, 2009 by the BOA,

SEC, BSP and IC

► Quality Assurance Review Office (QARO) - To be organized by BOA, which shall have independence in

the conduct of its operation.

► CPAs in public practice

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

THE QAR PROGRAM

► Coverage - CPAs / Engagements

► Registration - Required for all CPA practitioners.

► Mandatory Coverage - During 3 years from effectivity of QAR –

Mandatory for CPA practitioners with publicly listed and public-interest clients Optional for other CPA practitioners

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

THE QAR PROGRAM, cont’d

► Mandatory Coverage - After 3 years from effectivity of QAR –

Mandatory for all CPA practitioners ► Coverage

- QARO with BOA oversight

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

PREPARING FOR QAR- WHAT TO DO

► During “transition” – before effectivity of QAR

- QAR is here to stay – just a matter of time. - What do I have to do to get ready?

- Should be “Not much” - Compliance with quality control and auditing standards:

- Quality Control and Auditing Standards - PSQC 1

- PSA 220 - Continually Improve the quality control environment

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

PREPARING FOR QAR- WHAT TO DO, cont’d

► Follow the standards

► After effectivity - if selected for review - What to expect

Before the review During fieldwork After completion for the review

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

PREPARING FOR QAR- WHAT TO DO, cont’d ► After effectivity - if selected for review - To dos:

Before the review During the review

► In short - “Need to knows” to prepare: - Create an environment that follows quality control

and auditing standards. - Understand the QAR process - Know what the reviewer will do and focus on - Assemble the right information

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

EXECUTIVE SUMMARY

► Recognize what QAR is all about - QAR - the Why and How

► Recognize the importance of preparing for QAR - Preparing for QAR

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015

QUICK RECIPE ON PREPARING QUALITY ASSURANCE REVIEW JULY 16, 2015