The Institute of Chartered Accountants of Jamaica (ICAJ), as a member of the International Federation of Accountants (IFAC), is obligated to ensure that auditing firms comply with international auditing standards and international standards on quality control and assurance. This is implemented through a Practice Monitoring programme which involves all firms being subject to inspection visits which are also referred to as “audit monitoring visits” or “quality assurance visits”. The visits include a review of the firm’s quality control policies and procedures and an examination of a number of completed audits.

Launched in 2011 by the Public Accountancy Board (PAB), in partnership with the Institute of Chartered Accountants of the Caribbean (ICAC), the Institute of Chartered Accountants of Jamaica (ICAJ) and the Association of Chartered Certified Accountants (ACCA), Practice Monitoring inspires confidence in the quality of audit in Jamaica and consequently confidence in financial reporting.

Implementation has initially been out-sourced to ACCA (UK), the professional body which regulates and monitors thousands of accountants worldwide. Under these arrangements it is only the monitoring visits that are outsourced with the PAB keeping licensing and all other aspects of regulation in-house.

The review is executed by a Senior Practice Reviewer (SPR), a specially trained officer of ACCA, on behalf of the PAB. Audit monitoring visits cover the inspection of a selection of audit engagement files to monitor compliance with International Standards on Auditing.

For ACCA members, another exercise is added called the ‘Quality Check’ review which involves assessing a firm’s quality controls for audit work. Since the introduction of Practice Monitoring a number of firms have received the prestigious ACCA Quality Checked status from ACCA. In order to achieve the award – ACCA Quality checked firms had to demonstrate “best practice” in all aspects of their business, during inspection by ACCA compliance officers. The award of ACCA Quality Checked is one way of assuring businesses and the public that they can have confidence in the service offered by the Accountancy firms.

The Practice Monitoring Process

On the day the visit starts, the practice reviewer will hold a meeting with the audit principals of the firm. The purpose of that initial meeting will be to:

• ascertain and understand how the firm is organised and operates

• ascertain and understand the quality controls established by the firm to ensure audit work is performed in accordance with auditing standards

Having completed the review of audit files, the practice reviewer will conduct the closing meeting which is an important part of the monitoring visit. The purpose of the closing meeting is to:

• inform the firm of all matters arising from the visit, identifying any deficiencies in work and non-compliance with auditing standards

• give the firm the opportunity to clarify or rebut any of the points raised

• provide for discussions to take place as to how the firm should deal with deficiencies and areas of non-compliance in the future

An ‘educational’ and progressive approach is adopted where firms are encouraged to make the necessary improvements and take further remedial action, including undergoing audit training. ICAJ, in conjunction with the Public Accountancy Board, ACCA and ICAC, continues to organise seminars for partners, directors and sole proprietors of accounting firms to apprise them of developments and provide feedback from firms which have been reviewed.