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The Irish Accounting & Tax Summit
Session 3 - Audit Exempt Engagements in a COVID-19 World
Session 3 - Presentation
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Today is day 2 of The Irish Accounting & Tax Summit and we are going to be covering sessions three or four today. So what are we covering in this session? The topic of the session is all of the exempt engagements in the COVID-19 world. And I’m joined by column who present today’s topic today’s session as a one off session running from 11 till 12 column walks alongside me and practice support where we help firms on a day to day basis with annual compliance reviews called photo reviews,
hot flight reviews, house training, preimpulse monitoring support, and many other areas prior to joining Omnipro collum spent six years with chartered accountants, Ireland as a reviewer. And part of his remit here was carrying out non audit reviews to firms. So today he brings a very beneficial insight into what’s required as part of an audit exempt engagements, particularly in these uncertain times.
So downloads a economist provided some downloads for today’s session, which jr would put the in the comment box at peace. Take the time to download these as they continue school guidance material, and want to hand over to Columbia, go through what’s in the pack. So on, on questions, look, we value questions. We appreciate questions. Please send them in that.
There’s two ways you can do that. Fourth way is by, by the chat box. You’ll see if you look in the chat box, there’s an option to send the queries to all panelists. And if you do that, switch your schools to, to myself for Harlem, um, probably a better options maybe to send them directly to me, and then I’d feed them into column as,
as, as we’re going through. We’ll try and get to all the queries either, either during the presentation or at the end we’ll we’ll, um, we will have a Q and a session. And also just to remind you, there’s a Q and a box as well. If you want to, if you want to submit your questions and questions, that way either way is fine.
So, um, I suppose we get started on today’s session column. Do you want to take us through today’s topic? What we’ll be covering and also Watson great. Yeah. June is there in the office. So I would just say to everyone to maybe just maybe mute themselves so we don’t get any, any cross, cross, cross conversations. Yeah.
So, well, yeah. Great. So it takes me like, yeah, I think, I think there’s up until now. There’s been, there’s been a big focus on, on, on all this and, you know, COVID-19 has had a massive impact on the, on the, on the audit of, and on orders in general. And I think,
you know, Whitely sell, cause it’s, it’s, it’s, it’s, it’s, it’s, it’s the main area. I think we, we shouldn’t forget about these odd, Oh, the exams and engagements that firms are all undertaking<inaudible> directly important. And also, and in terms of, you know, there is an increased focus on, on, I am on the institutes in reviewing these files.
So really what we’re gonna do today is take you through, take it to the sort of, sort of, sort of that basic sort of stuff that seen before. And just before that, in your handouts and we have, and some support and documentation. So we’ve got the presentation that’s out on the slides, we’ve got the, the, our COVID-19 checklist,
not all a checklist. So, you know, what’s that been like has spent the last couple of months developing, developing these and with the army pro team developing these checklists to lay on top of your, of your, of your current procedures in terms of these are the considerations you should be baby bearing in mind in term, in terms of em, in terms of your own,
own exempt engagements. So that’s, that’s there. And I watch out for it’s version three. So just obviously, you know, when you, when you’re going onto the arc, make sure that you’re downloading the most open UpToDate version. There’s a quick guide, the<inaudible> guide to the compilation engagements under Iris 44, 10, that’s clear go-to, that’s your go to standard four and four,
four for compilation engages, which, which basically what, what all exempt all the exempt engagements are. Then we’ve got a, uh, a template or an example of memo, which we’ll kind of delve in and out of, and basically unordered exempt, an old exam engagement letter. That’s kind of where that’s kind of the documents we have if I go to the,
Okay, Great. So what we’re basically going to corporate today is, um, we’re going to the five topics here. So on exam, on exam criteria and who can tell you about exemption, really what we’re there basically is where we’re, we’re going to revisit some of their, some of their criteria and remind people of who are, who, and who can do cons,
same quality, all of the exemptions and the various criteria regarding that topic. Two is going to be on exempt fire. So what are the requirements now? You know, I know one example is it’s an audit exempt. It’s not an exempt engagement. So a lot, a lot of this, a lot of the stuff that we’re going to go through and is going to be from the point of view of say amounting business.
And a lot of it is, is best practice Bush. Well, what we’re seeing is that the bar is being, it’s being raised from the point of view of what was expected, expect it on a, on a, on an exempt file as Mike liking this excellent introduction and a better workout way introduction for Mike for next time, we were, we’re both coming from a background of<inaudible> of,
of being reviewers. So we’ve seen, Oh, sorry, sorry. Sorry. Okay. So I began a little bit and I will admit, I will admit I’ve done the dark side who wants to date? Well, we’ve, we’ve seen, we we’ve seen the type of files, so we know what the expectations are and now, and I totally accept this isn’t these,
all of these engagements and the pushback would have been very much Wendell, well, not sign the audit report, but the expectation out unfortunately is still there though. Those are the accounts report going in with this, you’re using your be a charter Kevin’s Arland, AC CA or CPA letters. The, the Institute are, are expecting a standard there. So we’ll kind of go through there.
Let’s see. I see what’s, you know, what’s, what’s involved industry, a dosha type of tree that will be all the exempt fund statements. Again, just revisiting on, on, on, on the type of financial statements that can be produced again, probably like in Keno, what type of copays can, or can’t basically a use on exemption.
Yeah. We’re going to get into COVID-19 consideration specifically for it. Obviously COVID-19 is going to go contract the entire, the entire session and then finally the monitoring visits. Okay. So one of the common issues that kind of come up from time to time on money business, how have you basically, if you get over the us, yeah. Oh, topic number one,
all exemption criteria who can claim all exemptions. So in terms of the standard small company, all the exemption criteria is it comes from section three 60 of the court actually does a 14. It’s been updated since the 2017 act that’s okay. You know, but we all know policy doesn’t exceed 6 million turnover. Doesn’t exceed 12 million and know employees doesn’t doesn’t exceed 50.
So, you know, there’s all this stuff we kind of already, already are, are, are very much, very much aware of then in terms of, you know, so it’s, it’s two out of two out of the three there’s two out of the three, two out of the, three of the, uh, of the balance sheet, total turnover and number a number of employees.
Okay. It’s in the current and in the, and in the proceeding financial year, unless it’s the, it’s the, it’s the fur. Well, that’s it the first, no, no. Once a year. So in terms of the questions we would kind of get is, okay, well look, bottled water. Wait, where do, where does the actual criteria to kind of come from?
So turnover is as per what’s on your, in your, in your profit, in your P and L or your expansion about the sheets it’s total balance sheets. So it’s, it’s the aggregate of the total of the assets in the balance sheet before deduction of liabilities. So with your secure you acid, and you’re on your own and your, who are your current assets before a deduction for four liabilities on that.
And that would be, um, that would be a common question or common area, common. And at era that the, that would come up and then the employee has no replies for each month of the year, whether employed, employed in fall or, or for the month or not. So that’s where the, where the number of employees, our clinical referral.
So that’s your standard standard, small copilot exemption. So you know who can’t, so yeah, you can’t play board Exemption if you’re, if your class and the Fisher schedule company. So it’s, so it’s our friends who are authorized by the central bank. So it’s your, it’s your investment? It’s your insurance intermediaries, your investment intermediaries, your, um,
your, um, your, those high level though, those, all those copays that are at and like bikes on and on credited as Institute, they’re all the guys who basically are deemed to be large companies they’re outside of the small company and criteria. So therefore they, they can claim small board exams that that’s a common enough, uh, when maybe not necessarily in the context of catering orders,
exemption, but certainly as regards to the company, Saudi’s column a, you know, it’s one that we regularly see that, um, you know, the size criteria get applied to a company regulated by the central bank by default, even if you’ve only one Euro in turnover and you’re regulated by the central bank by default here, you’re a large company. Yeah.
A hundred percent. I like, like, that’s where, that’s where the problems come from. And that’s probably where the unfairness of, of the, of the, of the 40 not cold fronts, because a lot of these, a lot that come with we with see would be small enough organization, small of companies, especially if they’re insurance centimeters or an investment Dimitris,
they’d be small enough companies. And unfortunately, because of them being on the fixed schedule, they’re deemed to be large companies. And kind of, of all of all the small company, small company<inaudible> exemptions like, like being all of the exemptions, another one there, another one that the guests, the companies is they must have filed their annual turns,
the annual returns on time in the current, on the preceding year. And again, that’s what, that’s, what gets a lot of, a lot of amp of, of coping, you know, then they fighters. Um, and they’re usually more, more trouble than they’re done. They’re done, they’re actually worth. So again, it’s, it’s,
it’s, it’s one of those. And unfortunately, you know, for all the time that I, I, I was, I was in, I was in carbon spectrum at this one. This wouldn’t be regularly raised and it doesn’t seem to be any movement I pink in, in, in taking this away from or taking it out of, of, uh,
of Coby legislation. It was put in there way back at the time of Mary Harney. As at the minute I finished her at the time, the brain to get able to UpToDate, it seemed to have worked. I don’t see any re I don’t see any, any, any, any low for this to be taken out by taken out by the legislature.
So it’s going to be in there for the, for the stable it anyway. And then obviously, if your claim is small company, old exemption, there’s specific wording that goes on the, on the balance sheet again, watch out for that. It is. So that is picked up on, uh, on, uh, on, on monitoring business when they’re reviewing finished statements,
whether you know, that you have included that the exact wording that is required to be in there, then another, another, another type of bond exemption. There is the small group company, old exemption, that’s section three for like nine. It comes out to 14, again, similar, similar enough criteria. And so the criteria is balance sheet, which is the holding company.
And so those injuries not exceeding 6 million, and that’s growing 7.3 million turnover and holding company has subsidiaries only seeding 12 million net and 14.4 million growth. And over employees against similar North holding companies, subsidiaries, not, not exceeding 50. And in turn, in terms of those, in terms of the additional kind of points to pointer posted the bear mines, this applies to any group coping,
if the group, as a whole qualifies as a group company. So you know, which, which is interesting. So you could, you could text, you have a, a medium sized company in there, or because if the group as a whole qualifies as a small group, it can claim, it can claim all the exemption as well for the entire group as subsidiaries,
undertakers, most taken as a whole satisfy two of the two out of the three conditions and above. So it’s two out of the, out of the balance sheet turnover, a number of employees conditions. And, and again, similar enough, the conditions must be met in the year and also in the, in the, in the, in the proceeding year or less,
the holding copy’s first financial year, let’s say women are similar enough and for the conditions to the, to, to, to the standard and the standard amp, small, small company and all of exemption. But just if I want interesting is that it applies to any company within the group, if the group, as a whole qualifies as a small group,
again, a couple of, couple of other, a couple of other points to do bear in mind. So yeah, in terms of how you, how you’re, how you’re calculating the figures there, there, there aggregate figures, I’ll turn over on balance sheet. And it’s net means after set offs and older adjustments made to eliminate group transaction. So just bear that in mind.
So after you, after you had that off your, your intercompany transactions, they’re there, they’re, they’re the figures that you will be going on again, similar, a similar enough amp or they’re similar enough, um, and criteria, and you can’t be fast at a fifth general company. So again, you know, at any, if the holding company or any,
if I’m correct, if the holding company or any of the group co-PI’s okay. Themselves,<inaudible> so authorized by the central bank, then the group itself con can’t claim can’t claim all the exemption again. So it’s just something to bear in mind, these little, small little Mickey mouse, pardon the Poland, and invest in intermediaries, uh, uh, you know,
cause coal, it costs a lot of, a lot of heartache, again, same seminar and off that the annual terms must be, must be fired on time in the current proceeding year. And then again, there is specific and worried too, too, to be included on the balance sheet. If you’re, if you’re claiming the small group<inaudible> Oh,
the exemptions, Well column, you kind of say you’ve gone through the criteria there. So what, what makes you all just exempt or what makes you all do that, et cetera. I suppose applying this to a non-autistic care visits, um, you know, generally the bar is set a lot lower on non audit visits and, you know, you’re,
you’re, you’re, you’re not expected to have anywhere close to the level of detail on a, on an audit exempt file as an audit, fine. If, if the size criteria are missed, as you know, so if, you know, probably decise criteria incorrectly, you issue an audit report, an audit, an accountant’s report, an audit report should have been issued.
Like that’s, that’s pretty serious in the context of a non audit business, I’m guessing, Oh, it would be, it would be, yeah. Like, you know, so, you know, so Very much so, and it will be picked up, it’d be picked up on an, on a visit and, and, and depending on the,
on, depending on the Institute, you’re, you’re looking at app you’re, you’re looking at em, you know, potentially okay. Oh, before the committee and explained the situation, you know, detailed, detailed responses as, as a of why you getting to audit I company, where, where am I, where am companies copies are required to em,
to, to, to have an audit and, and especially like, you know, you know, issues regarding, you know, and regulated entities on companies Where Dave, Dave applied on exemptions or two to a copy of where it needs to be honest, we’ll be, we’ll be fairly serious. Like it would be, it’d be, I cope law issue.
And these just to take a do, take it, do you take it quite seriously In terms of that? So, yeah. You know, getting a wrong is it’s something to be avoided from bolt, you know, a practical point of view, but also then from a, from a regulatory point of view. Um, but yeah, you’re right.
It, you know, if these will be picked up in terms of, by the way, on the monitoring visits, where they’re looking at to see where look, it could be obvious, or it could be, you know, lucky where it’s, it’s looked at a particular fire, the key is to document the criteria use and how you got to that stage.
Um, and then the, the other point that was the exemption section is basically doing a company audit exemption. So this is interesting. It’s not specific to a company size it’s based on a fact it’s actually dormant. So the directors at the right address are of the opinion for a minute, the opposition, and in the year concerned, the company is dormant when satisfies the conditions.
Yeah. There was no thing to be accounting transactions. It’s awesome. My besties comprise only permitted us to my abilities. They can apply. They can, they can avail of a dormant company, all odds, exemption, yeah. Under, under copies. So it’s something it’s something to bear in mind. Interesting. Interesting. In, in the stance that it’s not based on the size,
it’s actually based on<inaudible>. Okay. And in terms of what the foster process. So now you’ve, now you’ve determined that basically dynamic that you are, you are, and you are all exams, so what’s the process. Well, the process should be, Chris was hold, hold, hold him easy. Mmm<inaudible> appointment is terminated. Yeah. Yeah.
The order is sorta noses on the company and they send a copy of that. Notice to the CRO. What’s interesting is it’s not re you’re not required to inform my asset in this in okay. In that particular, in that particular case. And then just to bear in mind, the members have the, have the right to block. Oh, the exemption.
And it’s kind of follows on to the next couple of slides. It was interesting. Yeah. Correct. The attire comes at 14. There is no a myriad of sections that relate directly or indirectly to on exemption. Now I’m not going to go in, I’m not going to go am into it each individual one. Okay. Small company, which area or exemption criteria and,
and ally sections there there’s so, so many other sections within the Kozac relate directly or indirectly to us. So for example, you’ve got the section three to four, what of members to require and all that. So there’s, that’s what I’m saying. That the main rhythm sounds and come together and require required an oldest, the section three 43. You can,
you can accord application to extend your annual return date. I think that if you’re, if you’re, if you’re, if you’re, if you’re, if you’ve gone late and, and you understand that why until they stayed along too, and they went to the Vanderbilt exemption, you’re gonna use, you’re gonna apply to the court to, to, to extend your on your annual return date and then the other,
and then the other end, the other, the three, five, eight, and three, five nine regarding the actual audit exemption or exemption criteria. And then yeah, sort of, there is a, the section three 61, the member’s right to block and lot exemption and various other various other sections. So it’s just to watch out that there is,
there is a myriad of other sections within, within the comes at 14, that does relate directly or indirectly to M to two, to all the exemptions. And just, just to clarify one point here column, when we spoke, uh, in a couple of slides ago about Institute monitoring visits, I know it’s different depending on the Institute, but we spoke about carob.
Uh, typically non-audit visits. They’re not the norm, so you’re normal. No, no, yeah, no. Like All just and AML, uh, non-audit visits, they’re typically a follow on to possibly a bad or an adverse, um, an adverse audit visits from a, from a carrier point of view, from a CPA point of view, to do,
tend to look as both, all this non-artists anti money laundering, that the whole loss, um, you know, so, so, um, as someone who has just raised a query about, you know, the standards, the standard care visits, um, you know, it’s not necessarily what we’re talking about here. No, no, I would,
I I’d probably caveat that. Like, so in terms of, so your, like your, your, your, your charted visits would more, like if you are an audit registered firm, it’ll be focused primarily on, on, on all the files. And, um, and then obviously you’re right. You’re right. Mic, you know, they,
they have spawn at AMN onto two separate visits. I am entering into in terms of, in terms of, you know, if you’re, if you’re a chartered firm on your nose, you don’t have odd registration. When Dan, you, you, you are subject, you are still be to ongoing monitoring. And there, I know that there are starting to,
well, they were pre COVID-19 starting to roll out. Yeah. Well, you know, pro practice monitoring visits, which would cover non corporate non-audit files or odd exempt files. So even, even, you know, if you’re a firm and if, if you’re a four with all the registration, you probably won’t get, get an old exempt and all of the exams,
a flight review. But if you’re a charter for, with them, which I knew aren’t always registered. Yeah. There’s a possibility that you will get an, a, you know, a non on a visit or a practice monitoring visits, which we’ll cover, Oh, the exempt fires and other sections within, you know, within the firm, possibly anti money laundering,
the various things like that. So just by saying, um, Mmm. Um, you know, I I’m, I’m not always registered. It doesn’t mean your phone animals in terms of HCCA. Well, I don’t know, you know, we haven’t seen that their, their focus is Purdue is predominantly on all just, and at the audit audit review visits and<inaudible> and AML.
I, haven’t having a couple of cross where, where at ACA reviewers, she with you not on a file. So just, you know, if, if<inaudible> whatever that goes change and, and, you know, that will be, um, you know, we’ll, we’ll, we’ll, we’ll okay, Sean, I’ll take you on that. So,
in terms of all these, so what are the requirements? You know, What we’re looking at basically is each, each of each of the, each of the institutes have, have issued their own particular guidance, CPA house, and 40 and 14 charter had 141, an ACA have, have a fact sheet one 63. And again, these are all best practice,
And this is the difficult, this is the difficulties and dr. Ted died, like I would have had as a, as a, as a reviewer, the only two firms, all these documents are best practice. So It’s, it’s very hard to, uh, you know, you know, very hard to written. So you raise issues on fires.
It was very hard to, um, to, to two the thing I think, a firm and on and on and on, on exam fire, well, there is a certain level of, there is there is a, a best, a level that is required for fire to good to be completed, but the minimum requirements are the kinds of happy compared the cards with the comes at 14 accounting standards from the code on Dakota,
on the code of ethics, there should be a structured five would lead schedules, making faster statements to the work hiring names. And, and I’m like, that’s, you know, that’s a, that’s a basic, a basic, obviously be mindful of it. I have a virus 44 Tang, which is like, which is the international standards for, for compensation agreements,
that combination engagements, that’s kind of where, where all this is is it’s based on. But again, the problem is that basically they are, it is all best practice. Well, the Institute are setting a high bar okay. For their members because I’ll do they want, they want the profession and, you know, to get a good reputation in the industry,
in the, in the profession. So in terms of, so what, what, what requires, um, so yup. Basic planning. So all the, to all the guidance recommend that you touch a carrier planning of our, of our Lord exempt game, and it’s short include some kind of consideration of independence and your ethical considerations, including the fundamental principles,
integrity, objectivity, professional competence, do care, Hey, for professional standards. Again, I know it’s best practice. You know, you know, each, each business I’d be looking at to see something along these, certainly along this, on each file, just, you know, covering off on the, on these particular, on these particular points,
a basic understanding of the entity, including the influence of the entities, business, and operations. And yet he’s a County system and, and, um, uh, cases and accounting records. Now you’re all looking at me. You look, okay, this is sounding a lot lucky, a hell of a lot, like an audit column. I’m the,
I know what it isn’t. Um, like it’s a, it’s the level of recording. I don’t want to use the word documentation because documentation is my favorite word in an audit in a lot of sphere. Okay. The, the level of, of, of, of recording of the basic information of your, of your client, there needs to be something there.
And, and if it isn’t, the, it will be raised and it will be raised as a, in such a way that you’ll, you know, you’ll be, you’ll be required to, what’s something you placed in order in order to have it there. And then the last point there, the fussy reporting fabric used and including compliance with their probably odd exactly criteria is cost.
But to your point there, I’m like, you know, if there’s nothing on the file to show how you are satisfied yourself, that the copy, if the me can available exemption. Okay. Dot yeah. That will be raised as a, as a point improved from, or, or best practice. Right. I think, you know, obviously we’re not carrying those notice here.
It is probably more so that you’re, you’re using a country expertise. You’re not using all of this expertise. You shouldn’t associate your name with anything that’s misleading, any significant balances. You should have something there to support it all be that you’re not looking at the normal assertions that you’d be looking at from an audit point of view. Yeah, exactly. And I think if I,
if I am, we have a included, it included, included in our, in our M in our, in our notes is M did you go to okay. 66? I think it is in the, in the, in the nose pocket. Mmm, sorry. Yeah, here, here. Yeah. We have, like, I have an example of them.
Yeah. I, you know, I, I, I know I’m on exam fundamental, yo, this is, this, this will be based on, on, on the veggies to guidance on, on, on, on<inaudible>. Yeah. 44, 10. I’m really, I really want what you’re looking at basically here. Yeah. Awesome. You’re you’ve,
you’ve documented. So kind of planning and points, so you can show the, the, the, the, you can go back. You’re fine up. So what we’re looking at basically is, is that there’s basic understanding of the, of the, of the, of the, of the company. And so, you know, what, what are your overall,
what are your overall engagement objectives? That’s good. Be engaged with on file. Hmm. You’ve got it. You know, you have to hear the point I’m making regarding the, uh, the con consideration of the, the independence. Again. No, it is best practice. Well, something like this on the fire, we’ll cover yourself off on a,
on a myriad of, I have areas such as independence and such as, and, you know, knowledge of the entity, such as a, you know, an understanding of the internal controls, the, the backgrounds of the firm, Heather, all of them. Oh, an exemption. So it’s, it just goes, it goes into basically a basic knowledge,
knowledge of the NC and where this, where this will become apparent now with the current in the current climate is especially regarding COVID-19. So, yeah, COVID-19 that, we’ve all been focusing on kind of the older fires and the oldest situation with COVID-19 was to have an impact on no. Okay. Okay. Oh, the exam to entities, if you’re looking at,
you know, if you’re looking at a turnover, so w what, we’re looking at turnover of 12 million. Yeah. That’s still, that’s still a sizeable, a sizable organization. That’s your, that’s your M that’s your preparing a fire preparing up accounts for? So the expectations would be that there’s some kind of, you know, planning Dawn on us in terms of,
okay, you’ve got, you’ve got backgrounds to there, to, to, to, to the company back down to, to the operations where the weather, where they’re operating out of, and then your various cost information about, about the, about the client, and then how was, it could be information systems. So who does Fox? So, Mmm.
Again, you know, if this isn’t an artist, well, there needs to be some professional and standards put in place in order to, in order to, you know, to buy to, to tobacco, knock up your file. Yeah. And then going down and go and going down into, into basically how it’s, how, you know, what’s your role in preparing the first statements.
Again, it’s important that basically, you know, you know, you, you bear mind, you’re, you’re, you’re not doing it all. You are doing a combination degree combination and assigned, and as Mike, as you pointed out, you’re using your, your accounting accounting expertise in order to, in order to am yeah. To prepare us. So did you move back to the slides,
but then yeah. In terms of, so that doctor, that’s your basic planning. Yeah. Again, best practice without, without you would have your, your, your, your letter of engagement in place. And again, this, this will be locked up and yeah. On a, on a, on a, on a, on a w laundry business.
And I think all it institutes, we’re looking at the things that you do have an engagement in place know, and all your, all your engagement be an artist, no one older or, or anything like that. So at a minimum, your letter engage a niece with foods, you know, the independents intended use on distribution identification or the financial reporting framework.
So even if it’s ever as one or two, one eight or one Oh five, the nature and scope of the, of the engagement, it’s important here. Yeah. Somewhere in your, in your, in your native engagement, you’re saying, you know, it just a compilation that games, it’s not an audit. I think if you go to and the notes again,
um, it’s okay. Page, page 85, the six. Yeah. So you’ve got, you’ve got your, you’ve got your, you’ve got your, your, your, your, your, your letter of M of, of engagement here. And I think in there says, you know, the responsibilities of the, your, the, the director’s responsibility to,
to prepare the financial statements, your responsibility is sure. Covering off your scope, your work in, by referencing to whatever our technical statement. If it’s, if it’s chargers it’s, it’s an 41 or, or, or if it’s, if it’s, if there’s a CA is fact sheet one 63, I think the important thing to watch out for here is basically this,
you know, we’re not carrying out an audit, so that’s, I think the important thing to do to, to bear in mind and, and, and your, you are not, so this needs to be, this needs, needs to be included in your, in your letter, in your, and your body’s. Like, you’re not, you’re,
you’re, you’re not carrying extra time down or right. Okay. That it’s in terms of, and then the formal type of report and the responsibility of management. So it’s not as your responsibility to provide, to provide the information, to ensure the accuracy and completeness. You’ll just be doing a combination exercise by compiling their, their, the, the, the,
the financial statements. No,<inaudible> in, in terms of document and the work, and, and this, this way, this is where you, where, where it comes to in terms of, again, the guidance it’s best practice, but the sole kind of documentation of the work that you’ve carried out to ensure the figures are practical, you know,
by supporting schedules. And this is where, this is where we, this is where I would be looking at, you know, coming from a, from a monitoring point of view, but it isn’t just a trial balance posted up onto a phone first report and accounting and accounting system, and a set of accounts, send it to the CRO. There is some kind of fall out up prepared.
So at a minimum, you need to look at that, how would the flush deck reconcile with the underlying records? And I, and I’m documenting are recording explanations and other information provided by management know it’s important that basically that’s the point there, if they’re subsequently challenged by a reviewer that you can demonstrate the, the, the, the adequacy of the procedures that you want to talk,
the type of documentation that was obviously will vary on the complexity of their, of the, of the entities, books, and accounting and accounting procedures. So what you’re looking at basically is that, you know, if it’s, you know, a 30, a 30,000 turnover, uh, odd example, uh, engagement compared with, uh, you know,
a 10 million and, uh,<inaudible> exempt engagement, you know, are there, are there, well, I think the varying Mmm. And engagements, so that level of documentation will obviously, or level a, a type of file will, well, we will vary as well. So you need to pay the bare bed dynamite and, you know, documenting the matters of importance in terms of why do you,
I don’t use the word bubble ed evidence that engage was carried out in terms of the engagement, and then, you know, management management imagine representation. So again, it’s best practice to guess represent reps, rep representations for management, in terms of the estimates and the major, major, big ticket items, man, you know, things like stock and various things like that about the reliability and the accuracy and completeness of information.
So yeah, what you’re looking for, you’re looking at, you know, potentially your, your, your letter, letter of representation in terms of Harry you’re you’re, you’re you’re, you’re fine. Yeah. You know, if you were looking at me kind of gold is looking a lot, like in artist, it isn’t, well, the bar is,
well, the bar is a lot lower because it’s an, it’s an odd example engagement. There is a bar that you need to hit in order to pass or to get through<inaudible>. And so what are you looking at? You feel a fire, what’s a status standard fight in the, a minimum fire it’s brief planning information. So, you know,
a planning memo, it isn’t a particularly big documents, you know, it’s a, it is document. So<inaudible>, you’re calling your planning information, your consideration of your, of your independence, your, um, your understanding of the basic understanding of the entity and your accounting systems. You’re a commencement program. This is what I’m saying about commitment, probably determined availability to event of exemption.
So have you used some kind of checklist?<inaudible> two evidence that, that, that the, that the company kind of available exemption, so you’re supporting that works. So if anyone then doughs, you know, come to you to, to, to a, to queries, you have the, have the support on file. Lead change was kind of file structure.
Again,<inaudible> some kind of a fight. Okay. When, when, when I would have been doing audit visits, unfortunately for those firms that would work, that works particularly good at the, on the, on the audit side of the house. And we would have picked a number of files. They wouldn’t be very good on exempt files. They weren’t off the standard of the artist,
but they were excellent all exempt for us. So a lot of firms out there are, you know, no, no, welcome to fathers that need to be done. I know the type of type of work hair, right. Both. Oh, the exempt for it. Yeah. Some kind of, you know, some kind of checklist or a program for a,
for, for accounts prep. So, you know, the Omni pro all the exams and program on the arc, you know, aye, that file is, gives them a view of comfort. You know, you’re following a systematic process in order to, in order to am to, to prove to the pair, that, to pay your part of your file and prepare your financial statements and backing it up.
I let her add complex and checklists. So again, so, you know, how are you getting, how are you ensuring that your financial statements, correct.<inaudible> true fair. We, which will come into it exactly. Later on your ladder of engagement. And then in, in the current climate, you know, your consideration or your impact of COVID-19 on the company and the engagement.
So how are you, how are you evidencing desk? So if you, if you look back at the notes fair, I’m on page it’s 19. I think it is good. Yeah. So, you know, over the, over last couple of have the, have been repairing basically kind of, you know, so for many checklists for, for audits and for non-ad,
so this, this, this, the odd exemption one, and like that, you know, this is, would be recommended as to overlay on your procedures to go through in detail, how you have considered, and Joseph had the impact of COVID-19 on, on the, on the engagement itself. And you know, it, you know, all these dudes,
no dusk, you know, charged, I know how to have, have perhaps used their own version of the audit. One others, you are, we have our, we have our versions of this. This should be, I go to document roll, you’re all on exemption. And you engagements, it should be overlay on your current procedures. You’re going down to all the considerations are in relations to,
in relation to, and COVID-19, we feel disclosures the only concern, you know, the, the financial state within the financial statements areas. So if you’re looking down to planning and have a completion, if I look at the first statements, it’s actually themselves, you know, Oh, have you considers you know, no impairment yeah. Has had an impairment review being carried out.
So, so, so various, various issues like that, this is supporting the work that you’ve done already on your file. It’s so it’s a very useful reference point. Let’s say if a set of accounts have sat on the shelves for a bit of time, and obviously things change as, as times go on and you, you know, it’s a good refresher just to see a checklist of a certain amount of points.
And, uh, you know, whether they’re relevant or not, that’s something needs to change in your financials Very much so. And I just, I couldn’t actually pause the Bama. I think we’ve covered off most of these now, but like, obviously what we’re doing is we’re using our expertise.<inaudible>, that’s fine. So the information, okay. The important thing is you shouldn’t be,
you shouldn’t, you shouldn’t be allowing your name to be associated with which last statements when I use it without including, and it kept her report. The point here is, well, independence is not required. It is best practice that you, that you do document. If, if you want independent, you need to, you need to include that on your,
on your Academy report. Well, one question in here, I call them just about record keeping and your paper versus paperless. There’s no issues there. If you want to do paper to paper, if you want to do paperless just once, once it’s information is retrieved 100%. Exactly. Yeah. Like I obviously wants to, what’s available in some kind of format that is fallible.
So then you can give to, you can give to a review or, or, or an inspector again, just to reiterate, we’re not doing it all. So no insurance, no assurance has given. And then, you know, the flattest staples themselves to be prepared impaired in accord with the app on presentation and disclosure should give a true and fair view and never come on to dock,
like whether or not there’s any additional requirements, any additional disclosure required, but COVID-19 as a result of the issues. So that just the accounts report, you know, it’s, it’s, it’s okay. The standard standard headings that need to be included in there. So your title who was, who was to be addressed that you’re, that’s, you’re reflecting that you are engaged.
I mean, you are not carrying out orders, it’s in line with the various guidance and then you’re dating and the dating on, on the address. Mmm. So does it, that, that’s kind of the fires now. I know, I know, I know we’ve been saying a lot about it. There’s a lot of documentation involved in it. And just again,
just to reiterate, we’re not doing it at all, what, there is an expectation there that there is a fire will be a fight. There has been prepared in some kind of, so kind of format in some kind of systemized form at that time, when you are, if you are challenged, I am monitoring, you can produce, I support your,
your backup. So in terms of amp, in terms of, Oh, he’s front of statements, really? Just to<inaudible> two, two to remind everyone, you know, so for section one eight, so obviously in order to apply section one, a of efforts, one to eat, to meet the criteria, it’s actually two 88. So it needs to be small,
a small company, again, similar criteria, turnover, turnover, a million, yeah. Yeah. On sheet 6,000,050 and 50 employees, it’s monitoring for PA prepares commencing on the rafter, January 17th, who can’t apply again, it<inaudible> our old favorites tell you a five companies again, Oh, authorized by sending a bank of barn. They can’t. And you know,
they kind of, they can’t apply section one a again, if you’re a credit institution, it shows an undertaking and a holding company in a group where they were any of the answers already should have based on the above. So again, yeah, this will be another, another favorite queer and criminal co-op regarding central bank and central bank and register authorized entities.
They can’t apply<inaudible> section one, eight of, and so what does, what does apply you mean when it’s just, it’s really just a disclosure exemptions from, from efforts were to, so you’re still, you’re still applying all the, all the measurement and recognition criteria under efforts were to, you’ve got, you’ve got amp, you’ve got God limited, limited,
limited, uh, reduced disclosures. The last point here, I think, you know what? You’ve got to go into this in, in, in, in my new detail over, over the last couple of months. Yeah. Well, there’s a requirement for additional disclosure under the daughter’s COVID-19. So again, you know, it’s our, you know,
the requirement that basic goddamn that’s the flat staple of sales prepare it, true show, a true and fair view. And so that may require additional slowly, both. What would the, what would be the standard in that’s actually what a company I think your column is, uh, you know, we’re, we’re obviously not doing and all of this, where both,
you still need to, um, you know, first of all, you need to ensure your accounts show a true and fair view. And second of all, you don’t want to associate your name and something that’s misleading. So if you’re signing off a set of financial statements and there are significant, significant going concern issues in that, you know, that there should be some kind of a disclosure there just purely just to copy yourself all be that you don’t need to go into the same level of,
uh, of disclosure as, as you might under a, under a notice because the order is going concern disclosure would be driven by audience of five 70. You should be disclosing the nature of the outgoing concern issue and, uh, and management’s plans. Okay. And then, and then obviously the next one that is a micro entity. So, so,
you know, F F is one Oh five. Again, it, you know, you’re first off you first off have to meet the criteria as a small company in section two, two 88. Again, it’s mandatory for periods commencing one after one, January 17, and who could, who can apply as one to five. So it’s a micro micro entity.
So turn overnight exceeding three 50, sorry. Docs three 50 turnover like saving 700 K and amp employee’s 1910. So yeah, it’s a, it’s a it’s it’s. It is, it is funny. I micro micro entity again, it’s two or three, two out of three of the criteria in the current financial year and the preceding financial year, or lesson or message your first financial financial year.
I get to kind of, you can’t apply it again. So you can’t apply it if you’re, if you’re actually a five company. So are our all friends, those who are, who are regulated by, by the central bank and an interesting point here, basically. Yes. Well, charities charities specifically some down for applying. Yes. It would represent best practice.
Yeah. I think my does cover from is basically is that because efforts one to five is a very<inaudible> and standard there’s very limited disclosures. So there wouldn’t be the tribe, the transparency in terms of the required disclosures for forum four charges. And you know that a lot of amp, a little bit say government Folgers, like POBA land had you say,
or choir under require full efforts accounts to B to B to be prepared. So it is white. It’s not specifically as land. It wouldn’t represent best practices. Mmm. And then, you know, what does it mean? It’s a totally different budget as well, too. There’s a different, different, different accounting treatments. There’s minimum disclosures required. This is there’s a presumption of true and fair view.
Mmm. What if companies copies can provide additional, however, if they are available, they must follow the requirements of<inaudible> on a small company regime. So you’ve kind of gone up that level. And this really applies in the cases where we’re looking at COVID-19 where, you know, potentially there are additional disclosure regarding going concern regarding, you know, if energy for,
you know, these to have happened over COVID-19. And if there hasn’t been in the hospital and impact on the, on the financial statements. So they, they, you know, if you, if, if there are going to be, if you are, if the company is going to volunteer to make addition to the slogan, you aware of, they need to,
they need to follow the requirements of the next stage. Next step, always efforts more to<inaudible>. Mmm. Then, okay. So COVID-19 considerations like cover this off the last topic now and inter in terms of monitoring visits. So what are we doing? What are we looking at it in COVID-19? Well, it comes back to, it goes back to what you’re documenting on the file,
and it comes back to, and the part that we do previously, the usual COVID-19 supplementary procedures checklist. Well, this is, this is evidencing of the firm’s awareness of COVID-19. And we’re all aware of COVID-19 what in re in LA, in, in rev, in direct reference to it and all exempt engagement and the impact on the work. So it’s okay.<inaudible> recording.
Don’t use the word document he’s recording on, on the file, but COVID-19 has had, or has had, or will have an impact Mmm. The entity that you’re electrical the public company or financial statements. So it’s gold. So we’re looking at funding issues. So have you updated your planning memo or your planning and document for COVID-19? How has that impacted on your own understanding of the entity and on the various business risks that have affected the air,
they had to have affected the M the, the, the, the, the, the, the, the, the entity, and then your, your work on the engagement. You, they can show you how to have a letter of engagement place even vitally more important than in the carbon and in the current climate regarding we’re cutting, going, you know,
COVID-19, you know, best business practice to have had your letter and gave them in place. And then why not required, you know, have you had a meeting with the monuments? So do you understand, you know, how they let you know what the issues are with guarding their organization or their company in re in relation to COVID-19? Yeah. Yeah.
The starting point is getting your, getting your, your, your, your, your, your checklist, Oh, we’re labeling or overlaying it on the procedures that you’re actually using. Even if you’re not using any procedures, the, the, the COVID-19 checklist itself, it’s a, a brilliant aid memoirs into the, into the air. Then you need to look at us in the areas you need to be considering as at least as part,
as part of your M your, your, your assignments and then completion issues. So, yeah. Have you tailored or let letter of representation for COVID-19 in terms of yeah. You need specific COVID-19 representations in terms of, you know, the only concern in terms of the, is it the face to face preparation of golden, sir? Yeah. Is it’s appropriate for your organization?
Are you looking at representations regarding stuff? Real culpability of debtors. Okay. No, well, we’re not doing it audit office. We are, the requirement is that they’re, you know, you know, if there is a, an, a payment review needs to be, would need to be carried out, if there’s indicators on impairments, that’s coming directly from efforts will have to,
or if it’s one to one eight, so it isn’t, it isn’t, it it’s, it’s a financial reporting and, and master not, I’m not a compiling or, or, or a work matter, but again, representation is on bash on, on an, on a basic analytical review. So again, go back to the, go back to the,
go back to the checklist due to financial statements, make sense. So, tying, tying your planning into your fieldwork, into your completion, and the point of view of you’ve got your punny memo in place, it has been updated, it’s been tweaked or tailored for COVID-19 in terms of, okay. Have we had to shut down, or how do we eliminate business over glass,
you know, 12, 14 weeks? How, how has it impacted on, off, on our, on our work, in terms of M in terms of, you know, our, our, our accounting systems, how would they change? They’re tying that in, you’re tying that into, into, into the work you’ve done on the financials and your lead schedules on your,
and you’re supporting yourself, you’re just supporting backup here to the financials, and then overall do the actually make sense. And then do you require any additional disclosures in your franchise<inaudible> spoken about is the concerning it’s a goal because our base appropriately, which is our first off, I think it’s a big, a big issue, even in even an old exams or exempt engagements.<inaudible> an issue those that need to be including included yeah.
As a disclosure in the financials, and again, a post bondage in advance, you know, you know, Joseph again, recognition of, okay. And you know what your year end is know December 19, you know, February, March 20, no. In terms of, in terms of how, how, how, how, um, how COVID-19 has impacted on the,
on the, on the, on the, on the engagement on the company, and then on the financial, on the freshest debits areas, you know, are you applying the correct accounting procedure, accounting treatment? So, you know, they’re required to carry it or consider an a patent review. Again, that’s based on your work or based on the combination of work,
you know, is there evidence out there is an impairment? Is there any evidence of, you know, this needs to be okay, this goes in the fascial statements. Is there an impact on the, on the, on the coating treatment of, of the assets and liabilities due to due to impairment, again, that’s the director of responsibilities, but again,
as a company accountant, you need to ensure a gospel the last part here, but they can still show a true and fair view. As Mike says, you shouldn’t be putting you, shouldn’t be now in your name to be associated with financial statements, which, you know, are potentially materially ms. Stages, because either there’s an impairments that hasn’t been booked,
or there’s a disclosure that hasn’t been put in there. So it all comes back down to irrespective of where we are in terms of M you know, it’d be an odd, an odd exempt engagement. The first day of sales still need to show that’s true. And very few we’ll turn it back to COVID-19 and all the various issues. And it goes back to the,
it goes back to the COVID-19 checklist. Do you have any call with dab Mike or anything like that? No. Um, I, I suppose it might, might be a good time to bring in. We’ve had a couple of questions in here. Um, just a few, I think we’ve addressed most of them, but there’s a there’s water two here.
Um, so if we have a company that’s missed it’s ARD, but it’s a dormant company. Does the daughters, the NIST, ARD, Trump, the fact that it’s a dormant company, but my understanding is that a Misty or the will, will require that the audit regardless. Yeah, I think so. Yeah. I think so. The case.
Yeah. Yeah. Uh, then the, the next question, um, if a company misses its zero deadline, how long do you have to play to the courts to have the company have the exemption reinstated, or you have a query from a potential client who was not fired is 19 returned to the CRO is a too late to apply for reinstatement. But my understanding of that is the company can apply,
um, uh, op to the, to the courts up to when they’re struck off. I mean, obviously giving time, um, to draft the affidavit for the notice, et cetera. Um, and if the company has straight up lists the application to the court would pause any action on the strike off. So I think, I think once the company has struck off you can’t avail of section three anymore.
I wouldn’t proclaim to be an expert on company law or anything, but that’s my understanding of the situation. Great. What’s that like the last, the last topic really is you’re covering off monitoring visits on the common issues. And, you know, I think, I think we spoke about this<inaudible> this morning session. Like The reason there is the reason that there is an increased focus and has been a continued focus on all exempt for an all exempt engagements.
And there will be a continued focus that, you know, charters are, are, are, are rolling them out as part of their practice review, practice monitoring. I don’t, you know, CPA continue, you know, addressing or exempt all exams and engages on their visits. And ACA we have a comment naughty silent on an old exams where the,
where the issues are common are basically Sure. A number of yeah. Flush statement issues. Okay. So either, either LIDAR not applying the correct And Nope. Hmm. And not, you know, not applying the play any corrective reporting framework, you know, I see you just went to state applying a sealant, applied the frizzy omission of an accountant’s report and,
and general efficiency, the soldiers. And I think this is where the monitors for the reviewers guest firms, while, while we be speaking all the bench, the, the, the, the, the accounts file and, and, and, and the da, and the recording of the, of the, of the work has been best practice. This is really where firms are Gus.
If the financials that are going in are poor, This is where their points will be raised on, and this will come back to, and it’ll come back to basically yeah. You know, but they have dove tail dot with the lack of use of a structured program and, and the lack of review of the, of the engagement cause what they they’re saying.
Well, okay, you’re putting these into the public, the public domain or in the public domain. You’re putting your name too. So this is where you’re bringing in biggest juice and you’re pay the price. It’s okay. Profession down by not allowing this. I think also what kind of, what carries a good bit of weight there is that, you know,
you can fix the, you can start amending a file and you can kind of tidy it up and all that. Like once I set a financials assigned, it’s signed. So, you know, and obviously that’s then got into the public domain. So obviously then that carries an extra bit of waste. Yeah. And I like, you know, like they were like,
you know, when I was, when I was at our view, or this would be where we would, I don’t wanna use it from guests will be, we have got firms on us. Whereas the filed the file, the file might be, is probably poor. It, it, it, it dovetails into the first day because they are poor.
So you’ll hide your reg reaction on the, on the poor for statements, as opposed to the portfolio, you’ll get an external and external lamp, external or oral exams and a compliance review, which is, you know, um, what did we say unusual, but dots that’s where, where they would come from and planning issues, you know, again,
it’s best practice, but lack of sufficient appropriate planning of the engagement. So yeah, there’s not another file and say, look, what do you want the copy does? And, you know, consideration of am of, of, of, of, of independence, accounting systems controls. Yeah. Uh, how, how they’ve got a God had got exam and got exemption.
Sometimes I’ve seen things from, you know,<inaudible>, you know, a one paragraph document of a one page document that whites are Feis, as long, as long as there’s some kind of app Evelyn’s there, it is sort of evidence of the, of planning. So that’s where you know, this, and this is where they will, they will ding for firms.
Mmm. And then, and then the fight itself, okay. Know, lacking, you know, lack of evidence of Evan’s get lack of recording of work and going from what if I’m, what be it be it, the, the, the, the, the, the envelope of, of, of, of invoices or the trial balance to the financial statements,
you know, so some kind of verification work on compilation work, and, you know, the recommendations are there. They should have put out the regular protective, the, the, them that the technical statements, their best practice, okay. Guidance, but that’s their guidance. And you need to follow that guidance in order to have a compliant file. From the point of view of your,
on your Institute, you need to demonstrate the extent of your work and they need to buy, they need to, you need to back it up no matter how, about how much you fight about it. That’s what they’re looking for. That’s the bar that you’re aiming for. So the whole idea, idea of how you use a trial balance instead of fringes on the,
on the accounts. That’s why, that’s my old example. Yes. Yeah. And you know, what is it? Whoa. Mmm. I think another, another point that we’re talking about here, them, like, we’re talking about this in the context of, um, you know, uh, an institutional review and obviously depending on your institution, that’s the whole area of complaints.
And, you know, we would often see the complaints coming in for a farm, either from no, from a past client or a disgruntled client or whatever the case may be. And, you know, at that point, your files become subject to scrutiny, you know, cause it might like results in a complaint visit from your, from your, um,
from your regulatory body. I mean, what do you want to be able to demonstrate is, okay, we followed our procedures, we’ve carried out the, The assignments in the card. And so there’s just Before 10, you know, we have backups, we have supporting schedules. They’re not expecting an auditor to book it. They are expecting the best That structure is there.
And that’s 44, 10 has been followed. Yeah. And again, that goes back to one of the previous slides in terms of, you know, if you’re challenged, subsequently challenged, you could demonstrate the work. That’s what you have said. So who’s going to challenge it. It’s going to be, it’s true for Lamont. It does. I complained.
I just, the last point on issues on the, on, you know, the lack of use of an oral exam program, that’s it? They like to see an oral exam problem on fire. Okay. BS, whatever problem is they like to see it because it demonstrates aye. Aye. Aye. I taught process. Yeah. A structured approach to doing the work,
both, just walking it together. Okay. And, and then lack of evidence of, of, of the engagement partner or principal review. Yeah. You’re not just giving it to the reality. We give it to a member of staff. They go off and do it again. Yeah. You know, it’s the, it’s the firm engagement with needs to have some kind of,
so I’m kind of evolving in the review and then knock a written report with representation from directors. Okay. Why not required again, it’s best practice in terms of what, again, I know, I know we’re slightly over. We started slightly late, so I didn’t dust like the last lights. I know it’s been a, it’s a fairly whistle stop tour.
Yeah. No,<inaudible> like in terms of, you know, you need a structured approach, you know, a documented fire for your odd exempt engagements in terms of COVID-19 you need to of kind of overlay checklist or some kind on to ensure that you’ve tailored your documents appropriately yeah. Forest that you realize COVID-19 exist and there was an impact on your, on your client and then your financials.
They have, you’ve got some kind of checklist in place and hub and you have, you have recognized the impact of COVID-19 and we’re not at any additional, additional disclosures on us. Brilliant. So I think that’s, that’s more or less, more or less it column or less. Not sure if you have any, any closing remarks or anything like that.
No, I think, I think, no, I think that was it just, you know, again, I know I don’t want to you at all the expectation there is that there’s a all kind of document file there. So, and we’re fortunate, the bar is there. We need to, we need, we need, we need to be working to meet that bar so far,
not unconscious of the Italian. So we’ve gone, we’ve gone slightly over both. I think everyone has found best beneficial. Uh, we, we have what was meant to be a 20 minute coffee break. Now I think these are all starting a few minutes late. So I’ll probably stayed with be a 20 minute coffee break. And from 1220, we have our tech session with Laura Lynch from,
uh, Laura Lynch and associates just discussing employee share ownership. Who’s so, Hmm. Thank you everyone for attending hope everyone found the session, the session beneficial, but just kind of call them for his expert. He’s licensed the area in order to exempt engagements and jr has been, has been working VIT for us in the backgrounds. Hopefully we’ll see you again soon.
So thanks and goodbye.