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Audit & Assurance
Overcoming Obstacles to Enhance Quality Assurance
Quality assurance systems are an important element of a sustainable global financial infrastructure, as well as a requirement for all IFAC member organizations. But implementation is not an easy, straightforward endeavor and regulators and professional accountancy organizations (PAOs) face numerous challenges on the road to adoption.
For example, the Latin American region has experienced limited progress in quality assurance systems adoption and implementation. Only one out of 17 IFAC member jurisdictions has adopted a quality assurance system fully in line with IFAC requirements and just three jurisdictions have been able to adopt some of the requirements.
Overcoming these obstacles and challenges was the focus of a workshop held in June during the CReCER conference (Contabilidad y Responsabilidad para el Crecimiento Económico Regional or Conference for Accounting and Accountability for Regional Economic Growth) in Mexico City, Mexico. More than 60 representatives from 17 different countries shared the successes and challenges they’ve faced.
Throughout Latin America, there are still needs for:
- cohesive jurisdictional regulations and modern legal frameworks;
- improved technical and financial resources;
- agreements and collaboration among different stakeholders (e.g., PAOs, regulators, and firms) to advance quality assurance system establishment; and
- clearly established quality assurance system independence to ensure audit firm buy-in.
PAOs play a pivotal role in driving change and introducing processes to tackle these issues. They are in a position to implement some of the ideas that workshop participants had in order to move forward, including:
- developing a strategic planning process to promote establishing quality assurance systems;
- creating a committee to lead and promote the national PAO(s) activities related to establishing quality assistance systems, such as enhancing relationships with regulators;
- being proactive in engaging with audit firms and promoting the application of quality control standards;
- facilitating access to information on quality control standards to increase awareness and further encourage firms to apply the standards; and
- incorporating quality assurance-related topics into educational programming and linking quality assurance results to investigative & disciplinary systems to inform future trainings.
One of the key challenges that participants noted in this area was the lack of technical and financial resources within PAOs. Additional external assistance, therefore, may also be necessary and regional organizations are well-placed to provide this extra support. Regional organizations can assist by:
- collaborating with PAOs to develop replicable solutions;
- offering regional trainings on quality control standards and connecting PAO representatives;
- promoting and facilitating partnerships with international PAOs that have expertise and experience with developing quality assurance review systems; and
- developing a team of regional experts that can perform quality assurance reviews throughout the region with absolute independence.
Interested in learning more? Subscribe online to receive updates from the Quality & Development Team, and consider attending the Inter-American Accounting Association Conference in Peru in October 2017 where a follow-up workshop will be held.
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