Review of reporting on prospective financial information engagement questionnaire Review code Reviewer Review date
Introduction APES 345 Reporting on Prospective Financial Information prepared in connection with a Disclosure Document sets the standards for Reporting Service Engagements. Reporting Service Engagement means an engagement in which a member in public practice prepares a report on or in connection with prospective financial information where such prospective financial information or part thereof and the related report are included in a disclosure document. Note that the compilation of prospective financial information does not, in itself, constitute a reporting service engagement (see APES 315 Compilation of Financial Information in such circumstances). [APES 345.1.9] Where there are two or more partners, separate questionnaires for each partner must be completed. The questionnaire should be marked Y, N, or N/A. In the event that any commentary is provided it should be clearly referenced to the particular question in the questionnaire. All non-compliance with mandatory professional or legislative requirements is to be reported in the quality review report. The reviewer is advised to comment on all non-mandatory breaches in the Other Matters Report. Privacy In this Privacy Statement, Personal Information has the same meaning as in the Privacy Act 1988 (Cth). CPA Australia Ltd is committed to protecting the privacy and security of the Personal Information which it holds about you. The Personal Information which you provide us with in this Questionnaire will be used by CPA Australia Ltd to process your Quality Review; and may be used for aggregated statistics for monitoring and research. This information may be viewed by the CPA Australia Board Quality Review Advisory Committee and also the Financial Reporting Council and any other Regulatory authority. If you do not provide us with this Personal Information, we may not be able to process your review. You have the right to access any Personal Information which CPA Australia Ltd holds about you, subject to the exceptions in the Privacy Act 1988 (Cth). You may also request the correction of information which is inaccurate. Access and/or correction requests can be made at your local CPA Australia office. For more information on CPA Australia s Privacy Policy, visit our website at cpaaustralia.com.au 2
Client authority 1. Has permission been obtained from clients for the peer review of their file? Note: Please place the appropriate letter from the below list into the above box that corresponds with the type of file(s) being reviewed (i.e. a = Public Listed, b = Public Unlisted etc). Type of engagement files to be reviewed: a. Public listed j. Joint venture b. Public unlisted k. Unit trust c. Disclosing l. Discretionary trust d. Proprietary large m. Trust account e. Proprietary small n. Compliance plan f. Superannuation fund o. Individual g. Incorporated association p. Sole trader h. Unincorporated association q. Other (please list) i. Partnership * Each client s authority must be obtained before reviewing their file. If insufficient files exist for which client permission has been provided, and accordingly you believe it not possible to form an opinion based on the small sample size, contact the Quality Assurance Department at CPA Australia. Fundamental responsibilities 2. Has the member complied with the fundamental principles outlined in APES 110 Code of Ethics for Professional Accountants ( the Code ) and with relevant legislation? (APES 345.1.5, APES 345.3.1 and APES 110.100) Specifically: ++ Public interest obligations (APES 345.3.3 and APES 110.100); ++ Objectivity (APES 345.3.2 and APES 110.280); ++ Professional competence and due care (APES 345.3.8 and APES 110.130); and ++ Confidentiality (APES 345.3.12 and APES 110.140). Note: If answered No to the above, the member is in breach of the relevant standard. 3
3. Is there evidence that, before accepting the engagement, the member took reasonable steps to avoid a position of conflict or to adequately resolve the conflict or perceived conflict? (APES 345.3.2 and APES 110.220) Note: If answered No to the above, the member is in breach of APES 345.3.2 and APES 110.220. Professional independence 4. Has the member complied with Independence (as defined in APES 345) where the engagement required independence or where the member purported to be independent, including not acting as an advocate in such situations? (APES 345.3.4 and APES 345.3.7) Note: If answered No to the above, the member is in breach of APES 345.3.4 and APES 345.3.7. 4
5. Where the circumstances of the reporting service engagement made the engagement an Assurance Engagement, did the member comply with Section 290 Independence Assurance Engagements of the Code? (APES 345.3.6 and APES 110.290) Note: If answered No to the above, the member is in breach of APES 345.3.6 and APES 110.290. Professional competence and due care 6. In the event that the member has identified matters outside the member s area/s of professional expertise, has the member: ++ declined all, or that part of, the reporting service engagement; or ++ sought expert assistance or advice from a suitably qualified third party, and disclosed the name and qualifications of that third party, as well as the area of the report that included external reliance, in the member s report? (APES 345.3.9) Note: If answered No to the above, the member is in breach of APES 345.3.9. 7. Where the member has used the work of a suitably qualified third party, is there evidence on file that the member assessed the professional competence and objectivity of that third party and the appropriateness and adequacy of the work performed? (APES 345.3.10) 5
Note: If answered No to the above, the member is in breach of APES 345.3.10. Confidentiality 8. Where the member provided confidential information in accordance with a legal obligation of disclosure, did the member notify the client or the relevant third party as soon as practicable (provided that there was no legal prohibition against such notification)? (APES 345.3.15) Note: If answered No to the above, the member is in breach of APES 345.3.15. Professional engagement and other matters 9. Did the member document and communicate the terms of engagement in accordance with APES 305 Terms of Engagement? (APES 345.4.1 and APES 305) Note: If answered No to the above, the member is in breach of APES 345.4.1 and APES 305. 6
10. Where the member was approached by a potential client to undertake the reporting service engagement, did the member comply with Section 210 Professional Appointment of the Code? (APES 345.4.2 and APES 110.210) Note: If answered No to the above, the member is in breach of APES 345.4.2 and APES 110.210. 11. Where the member utilised the services of a suitably qualified third party, and unless the member had a legal obligation of disclosure, did the member disclose the opinion or the name of that third party without their prior consent? (APES 345.4.3) Note: If answered Yes to the above, the member is in breach of APES 345.4.3. 7
12. Is there evidence on file that the member gathered sufficient and appropriate evidence, having regard to the nature and terms of the engagement and the use to which the disclosure document would be put, to ensure that the conclusions, for which the member is responsible, were properly supported? (APES 345.4.4) Note: If answered No to the above, the member is in breach of APES 345.4.4 Provision of other professional services 13. Prior to accepting an additional engagement to provide other professional services with an existing client, did the member consider and evaluate the significance of any threats involved and, where appropriate, did the member consider and apply the necessary safeguards to reduce such threats to an acceptable level? (APES 345.6.2) Note: If answered No to the above, the member is in breach of APES 345.6.2. 14. Did the member provide other professional services to a client where the engagement partner responsible for the reporting service engagement considered it probable that the objectives of the other professional service, undertaken during the reporting service engagement period, were inconsistent with the objectives of the reporting service engagement? (APES 345.6.3) 8
Note: If answered Yes to the above, the member is in breach of APES 345.6.3. (APES 345.6.1) Documentation 15. Has the member prepared working papers that appropriately document the work performed and: a. provide a sufficient and appropriate record of the procedures performed; b. identify the source of significant information the member has used; and c. demonstrate that the reporting service engagement was carried out in accordance with APES 345 and all other applicable professional standards, including policies and procedures established in accordance with APES 320 Quality Control for Firms, and any applicable ethical, legal and regulatory requirements. (APES 345.7.1) Note: If answered No to the above, the member is in breach of APES 345.7.1. Reporting 16. Has the member taken all reasonable steps in accordance with the terms of the engagement to ensure that the prospective financial information does not contain false or misleading information, or omit material information? (APES 345.8.1) 9
Note: If answered No to the above, the member is in breach of APES 345.8.1. 17. Has the member taken all reasonable steps in accordance with the terms of the engagement to ensure that the disclosure document clearly states the basis(es) and key assumptions used in forecasting the prospective financial information? (APES 345.8.2) Note: If answered No to the above, the member is in breach of APES 345.8.2. 18. Where the member found that, subsequent to the issue of a disclosure document, information on which the reporting service engagement was based contained false or misleading information or omitted material information, did the member: a. take all reasonable steps to ensure that the client took appropriate action to inform anyone who had received the previously issued disclosure document of the situation (APES 345.8.3); and b. notify those charged with governance of the client if the member became aware that the client had not subsequently taken appropriate action (APES 345.8.4); and c. consider the firm s policies and procedures, in accordance with APES 320 Quality Control for Firms, to determine whether to continue acting for the client if the member became aware that those charged with governance had not subsequently taken appropriate action. (APES 345.8.5) 10
Note: If answered No to the above, the member is in breach of APES 345.8.3-5. 19. Does it appear that the member has knowingly or recklessly made a statement or caused another to make a statement in or in connection with a reporting service engagement that, by its content or by an omission, is false or misleading in a material manner?(apes 345.8.6) Note: If answered Yes to the above, the member is in breach of APES 345.8.6. Communication with those charged with governance 20. Did the member ensure that those charged with governance of the client, and any other persons or entities the member was instructed to advise, were appropriately informed on a timely basis of all significant matters arising from the reporting service engagement? (APES 345.9.1) Note: If answered No to the above, the member is in breach of APES 345.9.1. 11
Professional fees 21. Has the professional fee for the engagement been computed in accordance with Section 240 Fees and Other Types of Remuneration of the Code? (APES 345.10.1 and APES 110.240) Note: If answered No to the above, the member is in breach of APES 345.10.1 and APES 110.240. 22. Where the reporting service engagement required independence or where the member purported to be independent, did the member enter into a contingent fee arrangement or receive a contingent fee? (APES 345.10.2) Note: If answered Yes to the above, the member is in breach of APES 345.10.2. 12
Threatened and actual litigation 23. Where actual or probable litigation arose between the client or its related entities and the firm, which was other than insignificant, did the member consider the firm s policies and procedures, in accordance with APES 320 Quality Control for Firms, to determine whether to continue acting for the client? (APES 345.11.1) Note: If answered No to the above, the member is in breach of APES 345.11.1. 13
Overall findings: Breaches of mandatory requirements identified: Positive feedback to be conveyed to the member(s) in the Reviewer s Summary Other Matters Report: Deficiencies in the quality control system that will be noted in the Reviewer s Summary Other Matters Report with suggestions for improvement: CPA211888_WL 09/2011 V: FEB 2012 14