Firms that use the Canadian Professional Engagement Manual, the Professional Practice Manual or those who have created a firm-specific file template are likely to transition to the new reviewed engagement checklists published by CPA Canada, in part or in their entirety. While you don’t have to use a checklist, this is generally the most efficient file documentation tool, unless you are a very experienced assurance practitioner with no or limited staff.
We have been involved in the review of the new review engagement standard and have been working with these forms for a few years now. Based on our experience here are key areas for firm modification. Please note these recommendations are for firm template modifications, the specific engagement plan should be tailored on an engagement-by-engagement basis.
- Supplementary memorandum for understanding of the entity and its environment for identification of relevant entity or sector-specific information, as well as all information needed to provide tax compliance and other client services. The assurance standards do not contemplate the full services offered to review engagement clients and, as such, these are not included in the CPA Canada checklists.
- Sample process memorandums for cash, revenue, purchases and payroll. Remember that most CPAs who article in the 90s and early 2000s we not exposed to control-based audits. You will need to support your staff in documenting the client’s systems and cycles, and identifying weaknesses in the processes.
- Firm templated letter for communicating relevant information to those charged with governance. This communication should be used for much more than standards compliance. Think client service experience and marketing when drafting this template.
- Specific firm-developed account and transaction-based working papers such as revenue, gross margin and GST reconciliations. Unless there is a specific reason to do so, we do not encourage staff spending two to four hours of professional time on reconciling GST within nominal difference. We know, you think your staff spends much less time than that. Consider asking them the longest amount of time they have spent on that one working paper.
- Firm specific templates for budgeting and invoicing. The budgeting process will be very specific to each firm so this is one area to consider for tailoring. We also encourage you to have staff complete the first draft of the invoice. This may not only assist you in identifying where additional time was spent but will also have the added benefit of teaching your staff the business of public practice.
When it comes to transitioning to CSRE 2400, the more time spent on understanding the new requirements the better. Don’t look back in 2024 and wish you spent the time in 2017 to implement an effective transition.
Looking for more strategies on how to effectively implement the new standard, integrate the new templates and complete training for CSRE 2400? Check out Clearline Consulting’s Special Reports.
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