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Unformatted text preview: e Practice Review
Committee through the reviewer.
A meeting of the Practice Review Committee will be held to consider the reviewer’s report and the
member firm’s submissions. The Committee may issue a final report to the member firm and
instruct the reviewer to perform any follow-up action considered appropriate. The final report can
be categorised as follows:- (i) Such report may contain minor recommendations for improvements to the systems. The
member firm may exercise its discretion in considering what course of action to be taken.
The Institute will not perform any follow-up procedures to ensure changes are made. (ii) A variation to the type of report as mentioned in (i) above is issued where the member
firm is found to have achieved the major control objectives but some weakness are found
in certain control areas which are considered material enough to bring to the attention of 170 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants
[Issued January 2007] APPENDICES
the firm. The said firm should seriously consider the suggestions and recommendations
and take all necessary action (implementing new procedures) to ensure the objectives of
the particular control areas are achieved. A brief review/meeting will be arranged with
the member firm about twelve (12) months after the issue of the final report or if
possible, even earlier, to establish whether changes have been implemented.
(iii) Finally, there is also a report where a member firm is deemed to have failed to satisfy the
Practice Review Committee that it has sufficient controls to ensure its practice work is
consistently carried out in accordance with applicable professional standards. In such
case, the Practice Review Committee will order the reviewer to perform another practice
review no earlier than twelve (12) months after the issue of the final report. This will
allow time for the member firm to take steps to improve its controls system as suggested.
It is possible that where the third type of report reveals extensive weaknesses amounting
to unprofessional conduct within the meaning prescribed pursuant to the Malaysian
Institute of Accountants (Disciplinary) Rules 2002, the Practice Review Committee can
make a complaint to the Investigation Committee for its investigations. 171 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants
[Issued January 2007] APPENDICES
FILE SELECTION PROCESS
Is there any system of
general controls? No Yes
No Yes Will the review be more efficiently executed
by relying on general controls? Have general controls been
Yes Compliance Review on
general controls. Do the
results of the review indicate
reliance can be placed on
general controls? No No Yes Degree of reliance to be
placed on general controls High No. of partners
6 and above Notes : (i)
(ii) (iii) Medium to low No. of Audit
≥6 No. of Audit
≥10 No. of Audit
≥12 The reviewer will decide how many audit engagements will be reviewed within a
range at the planning stage.
The above table only gives a general indication of the number of audit engagements
to be reviewed. The exact number and extent of review will be dependent on
individual firm’s circumstances.
As a minimum guide, it is envisaged that the review of one audit engagement file per
partner involved in provision of auditing services is to be conducted. 172...
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