Sri Lanka Standard on Quality Control 1
FAQ
The Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) being the only national body of professional accountants, whose members are statutorily empowered to conduct audits of public companies, parastatals and organizations established by a statute, is obliged and committed to enhance the public trust and confidence placed in the audit profession to ensure members’ compliance with established auditing standards.
To enhance the effectiveness of audits and audit regulation, CA Sri Lanka worked on a project, funded by the World Bank to strengthen the capacity and competency of the Institute of Chartered Accountants of Sri Lanka to lead and oversee the design and operationalization of an Audit Quality Assurance (AQA) programme and to develop a sustainable QA framework. This project grant is expected to establish quality assurance arrangements for audit practitioners and make it functional.
The main aim of this programmeis to familiarize practicing members and firms with SLSQC 1 policies and procedures; and assist, guide and mentor them to help meet the standards of audit quality required.
- Audits conducted in accordance with Sri Lanka Auditing Standards will enhance the integrity and transparency of Financial Statements and improve public perceptions of financial reporting and auditing, and benefits that flow from such work.
- It will support capital market development.
- It will safeguard the audit practitioner and CA Sri Lanka from the risk of audit failure and enhance the credibility of the Profession and raise the profile of CA Sri Lanka and its members.
- It will help protect practitioners from claims for professional negligence.
The AQA programme will be launched on a voluntary basis, giving space for practitioners who need time to adjust to the standards established by CA Sri Lanka. It will provide assistance where improvement is needed, and obtain information on the state of readiness of practitioners.
AQA will be carried out in 2 stages –
- Phase 1 of the programme envisages initial assessment visits to practicing firms volunteering to have their practices reviewed by one of three retired senior audit partners of international firms in Sri Lanka on a confidential basis.
- A detailed file (engagement) reviewis envisaged to be rolled out in the second quarter of 2015 as Phase 2. That programme will be developed on the experience gathered in carrying out Phase 1.
Phase 1 will be preceded by SLSQC 1 training sessions, workshops and discussions, to raise awareness among practitioners.
Initial Assessment Visits focus on the procedures, processes and controls established by firms to ensure that audits comply with professional standards and that the firm meets the requirements of applicable laws and regulations. This discussion will assess and comment on the quality of audit work performed by a firm. This visit will not involve a detailed assessment of these policies and procedures but is aimed at providing assistance to you in complying with the requirements of SLSQC1, which became effective from 1stJanuary 2013.
The purpose of this visit, which should last for no more than half a day, is to make a preliminary assessment of the firm’s approach to ensuring audit quality and the quality control policies and procedures you have put in place in line with SLSQC 1.
Subsequent to the visit the Reviewer will provide you with a private and confidential report of findings and recommendations for your consideration and action.The report specific to a firm will not be shared with the Quality Assurance Board (QAB) or any other party. The findings will be used only to prepare a generic report to the QAB on areas requiring improvement. These reviews will;
- identify clearly any deficiency in compliance with SLSQC 1;
- help follow-up; and
- provide constructive and practical advice
The following panel of independent local QA Reviewers have been appointed by CA Sri Lanka to carry out the firm level reviews. This panel is technically strong with expert skills to carry out these reviews.
- Mr. Tissa Bandaranayake FCA
- Mr. Nirmal Fernando FCA
- Mr. Deva Rodrigo FCA
All relevant details are given in the brochure uploaded in CA website. You are requested to read the brochure sent herewith and to clarify any aspect of the Audit Quality Assurance Programme via telephone on 112352064 or e-mail This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
No fee is levied since AQA is currently on a voluntary basis.
No. CA Sri Lanka will mentor, uplift and enhance the performance of your professional practice and will not penalize any firm based on the findings of their voluntary programme.
- Improve audit quality with help and support from CA Sri Lanka
- Follow the policies and procedures laid down in SLSQC 1 (SLSQC 1 Training Sessions will be carried out this year)
- Be guided by the findings and recommendations the Reviewer provides after the preliminary assessment visit
- (If a SMP) Use the SME Audit Manual. (Workshops are to be carried out on the SME Audit Manual this year providing further guidance to SMPs to assist them on best practices, developments and application of Clarified Auditing Standards. This will help SMPs carry out their audits effectively)
- Use the technical support provided by CA Sri Lanka on any issues arising in implementing audit quality
