QUALITY REVIEW PROGRAM REVIEW OF COMPILATION AND TAXATION ENGAGEMENT QUESTIONNAIRE

Transcription

1 1 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire QUALITY REVIEW PROGRAM REVIEW OF COMPILATION AND TAXATION ENGAGEMENT QUESTIONNAIRE

2 2 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire Review Code(s) Reviewer Review Date INTRODUCTION This questionnaire has been designed to help you assess whether compilation and/or taxation engagements have been conducted in accordance with relevant professional standards. Where there are two or more partners, separate questionnaires for each partner must be completed. This questionnaire begins with a preliminary section for both compilation and taxation engagements, and then splits into two parts as follows:- Part A Compilation Engagement Questionnaire. Part B Taxation Engagement Questionnaire. All non-compliance with mandatory professional or legislative requirements is to be reported in the quality review report. The reviewer is advised to comment on all non-mandatory breaches in the Other Matters Report. Questions 1 through 4 are to be completed for all compilation and taxation engagements. Before progressing beyond questions 3 and 4, please refer to the accompanying notes for these questions to determine which part(s) of this questionnaire apply to each client file. PRIVACY In this Privacy Statement, Personal Information has the same meaning as in the Privacy Act 1988 (Cth). CPA Australia Ltd is committed to protecting the privacy and security of the Personal Information which it holds about you. The Personal Information which you provide us with in this Questionnaire will be used by CPA Australia Ltd to process your Quality Review; and may be used for aggregated statistics for monitoring and research. This information may be viewed by the CPA Australia Quality Review Advisory Committee and also the Financial Reporting Council and any other Regulatory authority. If you do not provide us with this Personal Information, we may not be able to process your review. You have the right to access any Personal Information which CPA Australia Ltd holds about you, subject to the exceptions in the Privacy Act 1988 (Cth). You may also request the correction of information which is inaccurate. Access and/or correction requests can be made at your local CPA Australia office. For more information on CPA Australia s Privacy Policy, visit our website at cpaaustralia.com.au/privacypolicy

3 3 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire CLIENT AUTHORITY 1. Has permission been obtained from clients for the peer review of their file? Note: P lease place the appropriate letter from the below list into the above box that corresponds with the type of file(s) being reviewed (i.e. a = Public Listed, b = Public Unlisted, etc). Type of engagement files to be reviewed: a. Public Listed g. Incorporated Association m. Trust Account b. Public Unlisted h. Unincorporated Association n. Compliance Plan c. Disclosing i. Partnership o. Individual d. Proprietary Large j. Joint Venture p. Sole Trader e. Proprietary Small k. Unit Trust f. l. Superannuation Fund q. Other (please list) Discretionary Trust Each client s authority must be obtained before reviewing their file. If insufficient files exist for which client permission has been provided, and accordingly you believe it not possible to form an opinion based on the small sample size, contact the Quality Review Department at CPA Australia. OBTAINING AN UNDERSTANDING OF THE SERVICES PROVIDED BY THE MEMBER 2. Has the member documented and communicated the terms of engagement when providing professional services to clients, clearly outlining matters such as the objectives, scope and output of the engagement to be performed by the member? (APES and either APES (for taxation services) and/or APES (for compilation engagements)) Note: If answered No to the above, the member is in breach of APES and either APES and/or APES

4 4 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 3. Does the member prepare Compiled Financial Information for the client? Note: A PES 315 defines compiled Financial Information as a presentation of historical or prospective financial information in a specified form, without undertaking to express any assurance on the information, and including financial statements. If the member has answered Yes to the above, the member has engaged in a compilation engagement for this client and may be required to issue a compilation report. If the compiled financial information is audited or reviewed by another member in public practice, or if the compiled financial information is for internal use only, a compilation report may not be required. Part A of this questionnaire must be completed for those files in which the member answered Yes to the above. 4. Does the member provide Taxation Services to the client? Note: A PES 220 defines Taxation Services as any services relating to ascertaining a client s tax liabilities or entitlements or satisfying their obligations under a taxation law, provided under circumstances where they can reasonably expect to rely on the services. Part B of this questionnaire must be completed for those files in which the member answered Yes to the above.

5 5 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire PART A COMPILATION ENGAGEMENTS PROFESSIONAL OBLIGATIONS 5. Is there evidence that the member planned the work to ensure engagements are performed in accordance with applicable professional standards, laws and regulations? (APES ) Note: If answered No to the above, the member is in breach of APES Where the compilation engagement is in respect of General Purpose Financial Statements (GPFS), has the member ensured that any departure from Australian Accounting Standards, the reasons for such departure, and its financial effects are properly disclosed and explained in the GPFS? (APES ) Note: If answered No to the above, the member is in breach of APES

6 6 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 7. Where the compilation engagement is in respect of Special Purpose Financial Statements (SPFS) that are not solely used for internal purposes, has the member ensured that the SPFS and the compilation report clearly identifies: that they are SPFS; the purpose for which the SPFS have been prepared; and the significant accounting policies adopted in the preparation and presentation of the SPFS? (APES ) Note: I f answered No to the above, the member is in breach of APES Is there evidence to show that when the member was of the view that the Applicable Financial Reporting Framework selected by a Client was not appropriate and the Client was not willing to adopt an appropriate framework, the Member considered the Firm s policies and procedures established in accordance with Acceptance and Continuance of Client Relationships and Specific Engagements of APES 320 Quality Control for Firms to determine whether to continue acting for the Client in a professional capacity? (APES ) Note: I f answered No to the above, the member is in breach of APES Is there evidence to show that when the member assisted their client with significant judgements regarding amounts or disclosures that the member discussed those judgements with the client and those charged with governance to ensure their understanding and acceptance of their responsibility? (APES ) Note: If answered No to the above, the member is in breach of APES

7 7 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 10. Has the member assessed whether the compiled financial information is appropriate in form and content and free from misstatements? (APES ) Note: If answered No to the above, the member is in breach of APES Where the member formed the view that information supplied by the client included a misstatement did the member perform additional procedures (including inquiries, assessment and verification) and request the client provide appropriate additional information or process appropriate amendments to complete the engagement? (APES ) Note: I f answered No to the above, the member is in breach of APES If the client refuses to provide additional information or process appropriate amendments the member shall consider the firm s police is and procedures established in accordance with Acceptance and Continuance of Client Relationships and Specific Engagements of APES 320 Quality Control for Firms in determining whether to continue acting for the client in a professional capacity (APES ). 12. Is there evidence that the member has prepared working papers that appropriately document the work performed, including: sufficient and appropriate records of all procedures performed; identification of the sources of significant information used; and d emonstration that the engagement was carried out in accordance with APES 320 Quality Control for Firms, and any applicable ethical, legal and regulatory requirements Note: If answered No to the above, the member is in breach of APES

8 8 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 13. Is there evidence that the member performed sufficient reviews of the compilation engagement in accordance with the firm s policies and procedures established in accordance with Engagement Performance of APES 320 Quality Control for Firms prior to issuing the Compilation Report? (APES ) Note: If answered No to the above, the member is in breach of APES In respect of GPFS or SPFS, is there evidence on file that the member has obtained client acknowledgement that the client is responsible for the reliability, accuracy and completeness of the accounting records and the disclosure to the member of all material and relevant information? (APES ) Note: If answered No to the above, the member is in breach of APES

9 9 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 15. Has the member issued a compilation report in circumstances where: a. the member s name is identified with the compiled financial information; b. e xternal parties other than the intended users are likely to associate the member with the compiled financial information, and there is a risk that level of member s involvement may be misunderstood; c. i t s more likely than not that intended users of Compiled Financial Information may not understand the nature and scope of member s involvement; or d. t he compiled financial information is required under provisions of applicable law or regulation, or it s required to be publicly filed? (APES ) Note: If answered No to the above, the member is in breach of APES Where the member has not issued a compilation report, due to the client engaging another practitioner to audit or review the compiled financial information, has the member documented the rationale for that decision? (APES ) Note: I f answered No to the above two questions, the member is in breach of APES and APES Where the client has engaged another member in public practice to audit or review the compiled financial information, and where an audit or review report has been issued, the member need only issue a compilation report for significant subject matter (if any) not covered under the assurance engagement (APES ).

10 10 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 17. Where the member has issued a compilation report in relation to Financial Statements prepared in accordance with a regulation or contract, has the member described in the Compilation Report the purpose for which the Financial Statements are prepared or referred to a note in the Financial Statements that contains that information? (APES ) Note: I f answered No to the above, the member is in breach of APES Where financial statements purport to be prepared in accordance with a contract or a regulation and the member forms the view that they don t adequately describe significant interpretations of the contract or the regulation on which the financial statements are based, the member shall modify the compilation report (APES ) 18. When the member has issued a compilation report, does the compilation report contain: a. the title of the report; b. the addressee; c. a statement that the Compilation Engagement was performed in accordance with APES 315 and that the member has complied with relevant ethical requirements; (APES 110) d. an explanatory statement that the member or the Firm is not independent of the client (if applicable); e. identification of the compiled financial information noting that it is based on the financial information provided by the client (if applicable); f. the basis of any forecast information and key assumptions (applicable to prospective financial information only); g. a statement that the client is responsible for the financial information compiled by the member; h. a statement that neither an audit nor a review has been carried out by the member and that accordingly no assurance is expressed on the compiled financial information; i. if the member is reporting on the compilation of Special Purpose Financial Statements, a statement to that effect as well as stating: i. the specific purpose for which they have been prepared; and ii. that the special purpose financial statements are only suitable for the purpose they have been prepared and may not be suitable for any other purpose; j. the date of the compilation report; k. the member s or Firm s name, address and signature; l. an appropriate disclaimer of liability; and m. a description of the responsibilities of management or Those Charged with Governance of the client, as appropriate, in relation to the Compilation Engagement, and in relation to the financial information? (APES ) Note: If answered No to the above, the member is in breach of APES (please list the exact subparagraph below)

11 11 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 19. Where the member has issued a compilation report in accordance with paragraph 10.2, 10.6 or is there evidence that the financial information compiled contains a reference such as Unaudited, Compiled without Audit or Review, or Refer to Compilation Report on each page of the compiled financial information? (APES ) Note: If answered No to the above, the member is in breach of APES Is there evidence on file that in the instance where there were any significant matters arising from the compilation engagement that these were communicated to those charged with governance on a timely basis? (APES ) Note: If answered No to the above, the member is in breach of APES Is there evidence on file that the member, upon obtaining information that indicates that a fraud, misstatement or illegal act had occurred, communicated these matters as soon as practicable to those charged with governance of the client? (APES ) Note: I f answered No to the above, the member is in breach of APES Where the member has reason to believe that such an act is the result of actions of Those Charged with Governance of the client, the member shall consider the firm s police is and procedures established in accordance with Acceptance and Continuance of Client Relationships and Specific Engagements of APES 320 Quality Control for Firms in determining whether to continue acting for the client in a professional capacity (APES ).

12 12 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 22. Is there evidence on file that the member had assessed the impact on the compiled financial information of facts discovered subsequent to the date of the Compilation Report (if any) and, if applicable, discussed the matter with the client and taken appropriate action, including documenting the reasons for the action taken by the member? (APES ) Note: If answered No to the above, the member is in breach of APES Is there evidence on file that the member, upon discovering subsequent facts and revising the compiled financial information, took all the necessary steps to inform anyone who received the previous issued Compiled financial information of the issue? (APES ) Note: I f answered No to the above, the member is in breach of APES If, in the view of the member, the client has not taken appropriate action in terms of paragraph 12.3, the member shall notify Those Charged with Governance of the Client APES and if, in view of the member, appropriate action isn t taken by Those Charged with Governance the member shall consider the firm s police is and procedures established in accordance with Acceptance and Continuance of Client Relationships and Specific Engagements of APES 320 Quality Control for Firms in determining whether to continue acting for the client in a professional capacity (APES ).

13 13 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire PART B TAXATION ENGAGEMENTS PROFESSIONAL OBLIGATIONS 24a. Is there evidence on file indicating that the member maintained open, frank and effective communications with the client, including advising them of their rights, obligations and options available under the taxation law and advising the client of their rights or options available with respect to the seeking of a private ruling and the lodging of objections and appeals against adverse positions adopted by the Revenue Authorities? (APES (a)) Note: If answered No to the above, the member is in breach of APES (a). 24b. Is there evidence on file indicating that the member maintained open, frank and effective communications with the client, including advising them on the application of the Taxation Law, including any possible penalties and other legal tax consequence, so as to allow the Client or Employer to make an informed decision of the course of action to be taken? (APES (b)) Note: If answered No to the above, the member is in breach of APES (b).

14 14 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 25. Is there evidence that the member provided their client with a statement in writing that: (APES ) a. the responsibility for the accuracy and completeness of the particulars and information provided by the Client rests with the Client; b. any advice given to the Client is only an opinion based on the Member s knowledge of the Client s particular circumstances; and c. a taxpayer has obligations under self assessment to keep full and proper records in order to facilitate the preparation of accurate returns. Note: If answered No to the above, the member is in breach of APES Please advise which of the sub paragraphs the member has breached. 26. Is there evidence that all required lodgements been made in accordance with the information provided by the client, their instructions and the relevant taxation law? (APES ) Note: If answered No to the above, the member is in breach of APES Is there evidence that when the Member provided a tax lodgement service to another party and a significant portion of the work associated with the revenue returns and other relevant documents was not performed under the supervision of the Member, the Member performed sufficient reviews of the revenue returns and other relevant documents in accordance with APES 220 and APES 110 prior to lodgement of the revenue returns? (APES ) Note: If answered No to the above the member is in breach of APES

15 15 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 28. Is there evidence that the member provided sufficient information so that the client was fully informed of the details of any tax scheme or arrangement and its current and future ramifications, particularly in relation to possible changes in taxation law? (APES ) Note: If answered No to the above, the member is in breach of APES Is there evidence on file indicating that the member has been knowingly or recklessly associated with an arrangement which involved documents or accounting entries intended to misrepresent a transaction or which depended upon lack of disclosure for its effectiveness? (APES ) Note: If answered Yes to the above, the member is in breach of APES Is there evidence on file indicating that the member promoted, assisted in the promotion of, or otherwise encouraged any tax schemes or arrangements where the dominant purpose was to derive a tax benefit without a reasonably arguable position under taxation law? (APES ) Note: If answered Yes to the above, the member is in breach of APES

16 16 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 31. Is there evidence to suggest that the member has a financial interest or has rendered any professional service where the member knows that the Member s immediate or close family have a financial interest in any entity that predominantly promotes tax schemes or arrangements? (APES ) Note: If answered Yes to the above, the member is in breach of APES Is there evidence indicating the member has used estimates in the preparation of returns or submissions other than in circumstances when the use is generally acceptable or because it was impracticable to obtain exact data in the circumstance? (APES ) Note: If answered Yes to the above, the member is in breach of APES Is there evidence on file to suggest that the member has provided a taxation service where the member knew the information on which the taxation service was based contained false or misleading information, or omitted material information, where the client was not prepared to appropriately amend it? (APES ) Note: If answered Yes to the above, the member is in breach of APES

17 17 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 34. Has the member obtained the consent of any third party that has provided opinions or advices in connection with the performance of a taxation service, prior to disclosing such information? (APES ) Note: If answered No to the above, the member is in breach of APES Does the member receive monies on behalf of a client? Note: If answered Yes proceed to the following question(s). If answered No proceed to question a. Is there evidence on the client s file that where the member has received monies on behalf of the client from Revenue Authorities they have promptly transmitted those monies to the client? (APES ) Note: If answered No to the above, the member is in breach of APES b. Is there evidence on the client s file that the member used, withheld or appropriated tax refunds to settle the fees of the member, or for any other use, instead of transferring the tax refunds to the client where the member had not agreed this with the client in writing? (APES ) Note: If answered Yes to the above, the member is in breach of APES c. Is there evidence that where the member banked funds on behalf of the client they used a separate bank account which is designated as a trust account and maintained in accordance with the requirements of APES 310 Dealing with Client Monies? (APES ) Note: If answered No to the above, the member is in breach of APES

18 18 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire 37. Is there evidence that the member prepared working papers in accordance with APES 220 Taxation Services that appropriately documented the work performed? (APES ) Note: If answered No to the above, the member is in breach of APES

19 19 Quality Review Program Review Of Compilation And Taxation Engagement Questionnaire OVERALL FINDINGS BREACHES OF MANDATORY REQUIREMENTS IDENTIFIED: POSITIVE FEEDBACK TO BE CONVEYED TO THE MEMBER(S) IN THE REVIEWER S SUMMARY OTHER MATTERS REPORT: DEFICIENCIES IN THE QUALITY CONTROL SYSTEM THAT WILL BE NOTED IN THE REVIEWER S SUMMARY OTHER MATTERS REPORT WITH SUGGESTIONS FOR IMPROVEMENT:

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