In Monitoring Visits: How to Prepare Colm Owens examined the key issues encountered in preparing for your audit monitoring visit and what to keep in mind after your monitoring visit.
ISQM1
The International Standard on Quality Management (ISQM1) is a crucial aspect of audit preparation. It's essential to tailor your ISQM1 manual to your firm's specific needs and ethical standards. This process involves assessing risks, maintaining a risk register, and ensuring compliance with regulations to prevent issues during audits and avoid regulatory penalties.
Independence, Confidentiality, and Fit and Proper Declarations
Maintaining independence and confidentiality is paramount in audit processes. Ensure that annual declarations are in place for all staff, including partners and subcontractors. If you use subcontractors, monitor their competence and have a subcontractor arrangement in place. Remember, you need to be involved in planning, execution, and fieldwork on those particular files.
CPD & IES8 (Revised)
Continuing Professional Development (CPD) is vital for maintaining and enhancing knowledge and skills. The revised International Education Standard 8 (IES8) emphasizes the importance of CPD in areas relevant to your audit work. Ensure that your staff and subcontractors have up-to-date CPD records, especially in areas directly related to the audits they handle.
Annual Compliance Review
An annual compliance review is a must. It's not just about conducting the review; it's about taking action based on the findings and evidencing these actions. Learn from your annual compliance review and implement necessary changes to improve your audit procedures.
Audit Procedures
Ensure that your audit procedures are up-to-date and comply with the latest International Standards on Auditing (ISAs). Regularly update your procedures to reflect changes in the ISAs and ensure they are tailored to the specific nature of the audit.
Firm’s Letterhead
Ensure your firm's letterhead is compliant with company guidelines. It should include all necessary information such as the names of partners, trade names, and other relevant details. This is an easy win but often overlooked aspect of audit preparation.
Professional Indemnity Insurance (PII)
Professional Indemnity Insurance (PII) is a crucial aspect of your audit preparation. Ensure that your PII covers all aspects of your work, including subcontractors if applicable. If there are changes during the year, update your levels accordingly.
Other Matters
Other matters to consider include maintaining an up-to-date complaint register and having alternative arrangements in place if you're a sole practitioner or the sole responsible individual. Any changes in the firm or practice should be reported to your institute or association on a timely basis. Remember, failing to do so could result in breaches of the code of practice, ethics, bylaws, and potentially company law.
Preparing for an audit monitoring visit involves a comprehensive review of various aspects of your practice. By following these guidelines, you can ensure a smooth audit process and avoid potential regulatory penalties.
For the full session, please click here. By watching this session, you will obtain an understanding of the key issues arising in relation to pre-monitoring visit preparation, post-monitoring visit actions and key topical areas. This will help you to prepare for a monitoring visit and to ensure that their firms remain compliant with the various institute requirements.
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.
