9 Jan 2010
ACCOUNTING firms that wish to audit public-listed firms will have a mammoth task raising their standards of practice once the Audit Oversight Board (AOB) comes into force.
This is based on the fact that accounting firms have fared rather poorly in the last practice review by the Malaysian Institute of Accountants (MIA). Furthermore, the AOB is expected to require firms to be fully compliant with the international accounting best practice called the ISQC1 (Internal Standards on Quality Control).
A glimpse of the requirements of the ISQC indicates that accounting firms will have to carry out a multitude of new processes and document them.
For example, accounting firms will need to produce manuals, templates, checklists and model working papers related to the performance of their audits on public companies. They also need to have at least three auditors working on a single listed company’s audit.
On human resources, ISQC requires accounting firms to produce a calendar showing their yearly staff training plans and monthly HR reports including training needs analysis.
If accounting firms do manage to fulfil these requirements, it will be a huge improvement from the current state of affairs, if the MIA’s practice review is anything to go by
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