The results are in and 23% of assurance firms are in need of some assistance and we are here to help. CPABC has released their 2016-2017 practice inspection results and almost one in every four firms providing assurance services did not meet the requirements of the practice inspection program. This represents a significant increase from the prior year where 15% of firms providing assurance services did not meet the requirements. The report details the common key deficiencies found in audits, review engagements, financial statement presentation and disclosure, quality control policies and procedures, as well as compilation and tax engagements.
In their report, CPABC provided commentary on what they believe are the primary drivers behind this:
- Firms that are performing engagements that are outside their core areas of practice; and
- A significant lack of documentation in both audit and review engagement files.
The cost of compliance with accounting and assurance standards can be significant which is something that we discussed in our special report Getting out of Assurance…Maybe?
For those of us that are committed to providing assurance services we believe that reviewing this document from CPABC is a key component of your firm’s annual monitoring processes and it comes at the right time as many firms will be turning their attention and resources towards administrative projects over the next few months. The practice inspection results are a good starting point to identify those deficiencies most commonly encountered by the practice inspection team. Where you come across some not so common deficiencies during your monitoring we are available to help you through the process. For more on the monitoring process refer to our special report The Five W’s of Monitoring.