By MIA SMP Department
The Quality Assessment Programme (QAP) is a structured voluntary review of audit firms, a collaborative effort by MIA and The Malaysian Institute of Certified Public Accountants (MICPA) with the aim of improving audit quality. It is limited to a review of the audit firm’s system of quality control based on information provided by the audit firm and a review of the application of the audit firm’s quality control procedures in a selected engagement file. The procedures include examination on a test basis of evidence supporting the audit firm’s assertions as to compliance with the applicable professional standards.
Upon completion of the review, the audit firm and its reviewers discuss the review findings and then identify the remedial actions to be taken to address issues highlighted in the findings. Subsequently, the reviewers finalise the findings and remedial actions and issue a final report which comprise findings for the firm-level review and the engagement-level review.
Below is a high-level summary of the common findings garnered and observed from 8 completed reviews since the introduction of QAP in 2016:
Firm-level Review – A review of the firm’s compliance with International Standard of Quality Control (ISQC) 1
Overall, the findings for the firm-level review indicated that there are apparent deficiencies relating to the existence of policies for the 6 elements of ISQC 1.
Engagement-level review – A review of the documentation of at least one completed audit engagement, for compliance with the applicable auditing standards and MIA By-laws in relation to audit engagements on financial statements prepared in accordance with the applicable approved accounting standards and the Companies Act 2016.
Audit firms that have yet to undergo MIA Practice Review Programme are encouraged to enrol in the QAP for self-improvement purposes. Firms that have participated in the QAP will be given time for quality improvement and will not be selected for MIA Practice Review at least within the 6 months after the completion of their QAP. Participating firms may also request for follow-up review post-QAP in assessing their progress in executing the remediation action plans as agreed with the reviewers.
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Testimonials from participating firms, detailed processes, charges and the comparison between practice review and QAP can be found in the following 2 articles published at e-AT in 2021: