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Is Your Firm Seaworthy?

Shutterstock_264369773The parallels between sailing and audit quality came to mind recently when I was speaking with a practitioner who is passionate about sailing. His comments about his enthusiasm for sailing reminded me of the profession’s passion and ongoing commitment to quality.

When sailors go to sea, they depend on their ships to get them to their destinations quickly and safely, conquering instability, uncertain weather conditions and unexpected obstacles along the way. In many ways, they place the same faith in their vessels as CPAs place in their firms. CPAs rely on the firms they’ve built to achieve their goals – to help them serve their clients and business communities, uphold the public interest and create thriving workplaces – as they navigate the many challenges of a fast-changing and increasingly complex environment. In both cases, a strong discipline and commitment to quality is critical to success.

Prepare for All Weather

Just as builders take steps to assure ships are built to withstand rough weather, CPAs take steps to give their firms a strong foundation that serve them well no matter what issues they encounter. Quality is promoted throughout each stage of an auditor’s journey— from their time as a student, preparing for the CPA exam, to their time as a professional, through experience and professional development.

The Institute’s 6-Point Plan to Improve Audits, issued in May 2015, examines each stage where we can better prepare for uncertain weather, and charts out profession-wide steps to batten down the hatches. For example:

  • Beginning in April 2017, a new version of the CPA exam will increase assessment of higher-order skills such as critical thinking, problem solving and analytical ability – essential skills for auditors.
  • Experienced auditors interested in performing audits in highly specialized areas, such as single audits and employee benefit plans, now have access to more targeted training, including Single Audit and Employee Benefit Plan certificate programs that will differentiate them and allow them to demonstrate their competence and commitment to quality.

These are just two examples of our progress since 2015. Information on these and other projects tied to quality can be found in the AICPA’s new Enhancing Audit Quality Initiative, Highlights and Progress 2016 report.

Make Sure the Firm Is Shipshape

I’m told sailors must continually assess the integrity and efficacy of their equipment. Likewise, CPAs must continually assess the integrity and efficacy of their quality control systems to make sure they’re maintaining the expected level of excellence. In the CPA’s case, that assessment is done through the firm’s monitoring and internal inspection programs, and the Institute’s Peer Review Program.

The progress report provides an overview of new quality-control tools, resources and training that we’ve developed to help firms establish and maintain effective quality-control systems, including model documents outlining quality control suggested practices for sole practitioners and small firms and a free, robust online toolkit designed to invigorate firms’ focus on quality in their practices. 

We’ve also made significant changes to the peer review program to more effectively monitor practice, including better deficiency detection and remediation, particularly in complex, high risk and regulated industries.

Get Ready for Smooth Sailing

Is your ship watertight and stable? The AICPA Enhancing Audit Quality initiative is dedicated to driving the kind of continuous improvement and evolution that will help firms retain their strong reputation, thereby reinforcing the credibility of the CPA designation.

Sue Coffey, CPA, CGMA, Executive Vice President - Public Practice, Association of International Certified Professional Accountants.

Sailing image courtesy of Shutterstock

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