Chartered Professional Accountants of Canada
Quality Assurance M anual
What’s New - QAM Update #6
EFFECTIVE IMPLEMENTATION OF YOUR
FIRM’S QUALITY CONTROL SYSTEM
Chartered Professional Accountants of Canada
Quality Assurance M anual
Author
Stuart Hartley,
FCPA, FCA, CA•IT
Chartered Professional Accountants of Canada
Quality Assurance M anual
Overview of QAM Update #6
This update addresses the feedback and questions received from
practitioners.
Key features:
 Expanded quality control compliance documentation
 Included further guidance on developing an annual quality control
improvement plan
 Revised engagement quality control review and file monitoring
checklists
 Added two new HR letters
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Structure of QAM
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Part A: The Standards and QAM Chapters
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Chartered Professional Accountants of Canada
Quality Assurance M anual
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Part A: Table of Contents
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Part A: Table of Contents
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Part B: Sample Quality Assurance Manuals
1.
2.
3.
4.
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Sole Practitioner with No Staff
Sole Practitioner with Staff
Small or Medium-Sized Partnership
Partnership with Audits of
Listed Entities/Reporting Issuers
Chartered Professional Accountants of Canada
Quality Assurance Manual
Quality Assurance M anual
[Appendices to the Firm’s Quality
Assurance Manual]
A.
Annual Confirmation of Compliance
B.
Suggested Responsibilities for the Firm’s Leadership Roles
C.
Confidentiality and Non-Solicitation Agreement
D.
Engagement Risk Assessment – Worksheet
E.
Hiring an External Consultant
F.
When to Consult – Worksheet
G.
Use of Consultants – Worksheet
H.
Criteria for When an Engagement Quality Control Review (EQCR) is
Required
I.
Hiring an External Person to Perform an Engagement Quality Control
Review (EQCR)
J.
Engagement Quality Control Review (EQCR) for Audit
Engagements - Worksheet
J-A.
Engagement Quality Control Review (EQCR) - Worksheet for Use with a
Review Engagement
K.
Hiring an External Monitor
L.
Ongoing Policy Monitor’s Report
M.
Completed File Monitor’s Worksheet – Audit File
Inspection
Resources for Developing a Firm’s Annual Action Plan for Quality Control
Improvement – Potential Quality Control Deficiencies
N.
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Maintaining the Quality Control System
Activity
Maintaining the System
Documentation
Ensure system is
operating effectively and
deficiencies are corrected
on a timely basis
Reports from the Firm’s leaders
Reports from the Firm’s
monitors
Action plans to address
weaknesses
Ensure the Firm’s QAM is
relevant and up-to-date
Details of the Firm’s QAM
review and the changes (if
any) made as a result
Annual confirmation
(by all personnel) of
compliance with
the Firm’s QAM
Ensure personnel
understand and comply
with the Firm’s QAM
Signed confirmations by
all partners and staff
Details on how any issues
arising were resolved
Annually communicate
results of QC monitoring
to the Firm’s personnel
Correct deficiencies
and ensure continual
improvement in quality
of work performed
Annual communication
to personnel with action
plans for remediation and
improvement
Annually
monitor compliance
with the Firm’s QAM
Annually
assess need for changes in
the Firm’s QAM
QC = Quality control.
QAM = Quality assurance manual (the Firm’s).
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Purpose
Chartered Professional Accountants of Canada
Quality Assurance M anual
The Two Types of Quality Control Monitoring
1. Ongoing Policy Monitoring (OPM)
 Firms can self-monitor
 Daily compliance with Firm’s quality assurance manual
 Annual report to managing partner on findings
 Recommendations for improvement
2. Completed File Monitoring (CFM)
 Minimum one file inspected per partner every three years
 Inspector can have NO involvement with file being reviewed
 Discuss specific deficiencies with engagement partner
 Report to managing partner on findings and provide
recommendations
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Sample Quality Assurance Manuals
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Sample Policies and Best Practice
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Chartered Professional Accountants of Canada
Quality Assurance M anual
Compliance Documentation
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Chartered Professional Accountants of Canada
Quality Assurance Manual
Quality Assurance M anual
Part C — Practice Aids
[Part C — Practice Aids]
Part C: Practice Aids
Page 1 of 1
Table of Contents
Chapter
Reference
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Title
Practice Aids – Sample Forms
1
A System of Quality Control
None
2
Commitment to Quality Work
2.01
2.02
2.03
2.04
3
Leadership and Culture
3.01 Firm’s organization chart — Partnership
3.02 Firm’s organization chart — Sole practitioner with staff
3.03 Firm’s organization chart — Sole practitioner with no staff
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Relevant Ethical Requirements
4.01 Independence decision tree
4.02 Engagement partner rotation — Control form
4.03 Sample independence letter
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Client Acceptance/Continuance
5.01
5.02
5.03
5.04
Assurance engagement acceptance form — Detailed
Assurance engagement continuance form — Detailed
Engagement letters — Optional paragraphs for reporting issuers
Agreement letter for successor auditor review of files
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Human Resources
6.01
6.02
6.03
6.04
6.05
Performance appraisal — Annual self-assessment and plan
Performance appraisal — Annual
Performance appraisal — Specific engagement
Offer of employment letter
Employee discipline letter
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Engagement Performance
7.01 Communicating with audit committees — Sample paragraphs
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The Need to Consult
None
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Engagement Quality Control Reviews
None
10
Differences of Opinion
None
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Engagement Documentation
None
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Monitoring
12.01
12.02
12.03
12.04
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Complaints and Allegations
None
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Listed Entities/Reporting Issuers
None
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Summary of Possible Compliance
Documentation
None
Setting the Firm’s performance targets
Engagement report release transmittal form
Firm self-assessment of work quality
Summary of Firm’s quality control documentation —
Blank/ Sample completed
2.05 Annual quality control improvement plan — Blank/ Sample
completed
Annual report of ongoing policy monitor — Worksheet
Report of completed file monitor — Worksheet
Ongoing policy monitoring — Work program
Completed file monitoring — Work program
Chartered Professional Accountants of Canada
Quality Assurance M anual
QAM Update #6 Will Help Your Firm
Document your firm’s ongoing compliance with its quality control
policies
Perform effective engagement quality control reviews
Ensure key areas are addressed in performing a completed file
monitoring review (a completed form has also been added)
Organize, perform and prepare monitors’ reports for:
 Ongoing policy monitoring (OPM)
 Completed file monitoring (CFM)
Continually improve your firm’s system of quality control
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Chartered Professional Accountants of Canada
Quality Assurance M anual
CPA Canada Professional Resources
Quality Assurance Manual (QAM)
Canadian Professional Engagement Manual (C•PEM)
C•PEM Electronic Templates
Model Financial Statements (Accounting Standards for Private
Enterprises (ASPE) and Accounting Standards for Not-for-Profit
Organizations (ASNPO))
www.cpastore.ca
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